Tarman ATM Inc. v. Offman, 2021 NSSC 160

SUPREME COURT OF NOVA SCOTIA Citation: Tarman ATM Inc. v. Offman , 2021 NSSC 160 Date: 20210412 Docket: 487094 Registry: Halifax Between: Tarman ATM Inc. and Olympia Benefits Inc. Plaintiffs v. Stephen Louis Offman Defendant Decision Judge: The Honourable Justice Peter P. Rosinski Heard: April 13, 2021, in Halifax, Nova Scotia Counsel: Michelle Chai and Lauren Harper, for the Plaintiffs Stephen Offman, Self-Representative for the Defendant By the Court: Introduction [ 1 ] Mr. Offman received $330,000 (separate amounts of $30,000 and $300,000) from the plaintiffs.

They knew that he intended to use the money in ATMs that he owned or controlled. According to the plaintiffs, he is personally responsible and has not repaid the loan amounts as agreed. [ 2 ] The plaintiffs seek

summary judgment on evidence against Mr. Offman for those monies lent in the amount of 30,000, and $300,000. [ 3 ] The plaintiffs say they lent money to the defendant as follows: 1. $30,000 by way of the written loan agreement dated October 10, 2017 [ ”the Principal Loan”]; and 2. $300,000 by way of verbal agreement (as well as email communications) on October 25, 2018 , which was physically transferred to Mr.

Offman that day [”the Convention Loan”]. [ 4 ] The only evidence before the court is contained within the three affidavits from the plaintiffs’ affiants. [ 5 ] The plaintiffs’ affidavit evidence indicates that the original amounts of money were released to Mr. Offman, and that according to the terms of the Principal Loan presently a net amount of $34,044.41 remains outstanding. They allege that the contractual terms and conditions of the (reduced to writing) Principal Loan should be applied to the Convention Centre Loan, such that a net amount of $183,499.53 remains outstanding. [ 6 ] Mr.

Offman’s Statement of Defence succinctly states his position: “If any loans were made by Olympia and/or Tarman, which is not admitted but denied, they were made to Coin Nation ATMs Inc. (incorporated under the laws of the province of Nova Scotia) and not to the Defendant.”

Summary judgment on evidence [ 7 ] Civil Procedure Rule 13.04 provides for

summary judgment on evidence in an action: 13.04

(1) A judge who is satisfied on both of the following must grant

summary judgment on a claim or a defence in an action: (

a) there is no genuine issue of material fact, whether on its own or mixed with a question of law, for trial of the claim or defence; (

b) the claim or defence does not require determination of a question of law, whether on its own or mixed with a question of fact, or the claim or defence requires determination only of a question of law and the judge exercises the discretion provided in this Rule 13.04 to determine the question.

(2) When the absence of a genuine issue of material fact for trial and the absence of a question of law requiring determination are established,

summary judgment must be granted without distinction between a claim and a defence and without further inquiry into chances of success.

(3) The judge may grant judgment, dismiss the proceeding, allow a claim, dismiss a claim, or dismiss a defence.

(4) On a motion for

summary judgment on evidence, the pleadings serve only to indicate the issues, and the subjects of a genuine issue of material fact and a question of law depend on the evidence presented.

(5) A party who wishes to contest the motion must provide evidence in favour of the party’s claim or defence by affidavit filed by the contesting party, affidavit filed by another party, cross-examination, or other means permitted by a judge.

(6) A judge who hears a motion for

summary judgment on evidence has discretion to do either of the following: (

a) determine a question of law, if there is no genuine issue of material fact for trial; (

b) adjourn the hearing of the motion for any just purpose including to permit necessary disclosure, production, discovery, presentation of expert evidence, or collection of other evidence. [ 8 ] In Baypoint Holdings Ltd. v Royal Bank of Canada , 2018 NSCA 17 , the court described the analysis required on a motion under Rule 13.04: [23] Shannex Inc. v. Dora Construction Ltd. , 2016 NSCA 89 , interpreted the Rule to pose five sequential questions: 1. Does the challenged pleading disclose a “genuine issue of material fact, either pure or mixed with a question of law”? 2.

Does the challenged proceeding require the determination of a question of law, either pure, or mixed with a question of fact? 3. Does the challenged pleading have a real chance of success? 4. Did the judge exercise the “discretion” to fully determine the issue of law? 5.

If the motion under Rule 13.04 is dismissed, should the action be converted to an application, and if not, what direction should govern the conduct of the action? (¶34-42) [24] The judge correctly identified Shannex as the appropriate test and asked himself the first question: The first is whether the pleadings “disclose a ‘genuine issue of material fact’, either pure or mixed with a question of law?” If the answer is yes, the matter is not one for

summary judgment. “A material fact is one that would affect the result.” The moving party has to show that there’s no genuine issue of material fact. In this case, Mr. Early has filed affidavits asserting many facts. They set out, in detail, his view of how these things happened. What cannot be denied, however, is the fact that there’s a mortgage and that it hasn’t been paid. He can set out the reasons why it hasn’t been paid, and he blames RBC for that, but the fact is the mortgage has not been paid . [Emphasis in Baypoint Holdings .] [ 9 ] Thus, in this case I must ask myself those questions in relation to each alleged debt-the Principal Loan and the Convention Centre Loan.

1-The Principal Loan ($30,000) [ 10 ] The plaintiffs’ pleading is that they loaned money to Mr. Offman personally, and he has not repaid it according to their agreement. [ 11 ] Mr. Offman’s pleading is that the money was not loaned to him, but rather to a corporate entity. [ 12 ] The material facts potentially in issue are: 1. whether Mr. Offman, in his personal capacity, borrowed money from the plaintiffs under the Principal Loan; and if so 2. whether he is obligated to repay that debt, including the claimed interest.

The question is whether there is a genuine issue of material fact regarding the claim arising from the Statement of Defence. [ 13 ] The affidavit evidence of the plaintiffs establishes that the written loan agreement was clearly between the plaintiff Olympia Benefits Inc. [”Olympia”] and Mr. Offman personally. Coin Nation ATMs Inc. [“Coin Nation”] did not exist at the time the Principal Loan agreement was entered into. [ 14 ] Mr. Offman signed the agreement in his personal capacity. The Principal Loan agreement included a demand promissory note. The money was sent by electronic funds transfer directly to Mr.

Offman on October 12, 2017. There is no evidence of repayment. There clearly has been a default by Mr.

Offman. [ 15 ] The agreement’s terms of repayment included provision for the accumulation of interest upon the outstanding balance at “prime” plus 1% per annum. [ 16 ] There is simply no genuine issue of material fact, either pure or mixed with a question of law, in relation to the Principal Loan claim. [ 17 ] Moreover, there is no genuine issue of material fact regarding the interests of Olympia being assigned to Tarman ATM Inc. [”Tarman”] – and therefore none in relation to Tarman’s claimed entitlement herein. [ 18 ] Furthermore, there is no genuine issue of material fact arising from the Statement of Defence. [ 19 ] There is no question of law to be resolved. [ 20 ] I must grant

summary judgment in relation to the Principal Loan in the amount of $34,044.41. 2-the Convention Centre Loan ($300,000) [ 21 ] The plaintiff’s pleading is that it loaned money to Mr. Offman personally, and he has not repaid it according to the agreement. Mr. Offman’s pleading is that the money was not loaned to him, but rather to a corporate entity [in this case Coin Nation]. [ 22 ] The material facts potentially in issue are: 1. whether Mr.

Offman, in his personal capacity, borrowed money from the plaintiff under the Convention Centre Loan; and, if so 2. whether he is obligated to repay that debt, including the claimed interest. The question is whether there is a genuine issue of material fact regarding the claim arising from the Statement of Defence. [ 23 ] Coin Nation ATMs Inc. was in existence at the time of the Convention Centre Loan. [ 24 ] The plaintiffs’ claim is that that agreement for the Convention Centre Loan was not expressly reduced to writing, but that there was nevertheless a verbal agreement.

They assert that the parties were known to each other, and had done business otherwise, such that there was a verbal understanding that the terms of the Principal Loan would govern the Convention Centre Loan. [ 25 ] Is there a genuine issue of material fact regarding whether Mr. Offman owes money to the plaintiffs under the Convention Centre Loan, or, if so whether he is obligated to repay that debt, including the claimed interest? [ 26 ] While the Principal Loan dated from October 10, 2017, the Convention Centre Loan arose in October 2018. [ 27 ] In his March 2020 affidavit, Mr.

Wilson states that he received email chains indicating that Mr. Offman was requesting $300,000, and a Garda World slip indicates that he received this money on October 25, 2018. Moreover, Mr. Wilson states that: “by way of verbal agreement, Tarman ATM Inc. agreed that the Convention Centre Loan would be repaid by Mr. Offman within a two- week period following the conclusion of the Hal-Con event. When Mr. Offman did not repay the Convention Centre Loan within a specified two week period, Tarman redirected the payment of all settlement amounts processed by Tarman for the benefit of Mr.

Offman to Tarman in partial satisfaction of amounts owed by Mr. Offman with respect to the Convention Centre Loan. An aggregate amount of $125,900 was repaid to Tarman in this manner… A further $9960 was repaid to Tarman as a result of the redirection of settlement amounts processed by Tarman for the benefit of Mr. Offman. No further payments have been made by Mr. Offman with respect to the

Convention Centre Loan since December 3, 2018…” [ 28 ] The plaintiffs assert that at no time did Mr. Offman make reference of any involvement by Coin Nation. In his supplemental affidavit Mr. Wilson noted, at paras. 13 – 14: “Tarman and I understood at all times that the Convention Centre Loan was made with Stephen Offman in his personal capacity. In fact, prior to sending of the vault cash [$300,000] for the Convention Centre Loan, referred to at paragraphs 20 – 24 of the March [2020] affidavit, I recall I had a conversation with Mr. Offman about who the money was to be sent to.

He inquired if the money could be sent to his company, Coin Nation ATMs, so that an employee of Coin Nation ATMs could load the cash into the ATMs. I told him the money had to be sent to him personally, because the Principal Loan was with him personally . I informed him the vault cash would be sent to him personally, that he had to sign for the money, and that he personally had to load the money into the ATMs.” [My italicization added] [ 29 ] It is clear that $300,000 were sent to the attention of Mr. Offman personally on October 25, 2018. The evidence is also clear that before the transfer of that money, Mr.

Wilson inquired who would be responsible to receive the $300,000: I told [Mr. Offman] the money had to be sent to him personally, because the Principal Loan was with him personally. I informed him the vault cash would be sent to him personally, that he had to sign for the money, and that he personally had to load the money into the ATMs. [ 30 ] Moreover, he stated: Throughout my dealings with Mr. Offman following default of the Convention Centre Loan, Mr. Offman never redirected me to the allegedly correct party [Coin Nation] to contact regarding the repayment of the Principal or Convention Centre Loan(s).

To my knowledge the first time that Mr. Offman suggested that Coin Nation ATMs was the correct debtor to the Convention Centre Loan was when he filed his [Statement of Defence]. [ 31 ] With respect to interest payable on the Convention Centre Loan debt, the plaintiffs rely on CPR 4.03 (2)-see their supplemental submissions by letter dated December 17, 2020. The Rule states, in part: Notice of action for debt 4.03

(1) A plaintiff who claims only on a debt, and who claims no interest, interest under an agreement that expressly provides for the payment of interest, or prejudgment interest under the Judicature Act may start an action by filing a notice of action for debt.

(2) A plaintiff who files a notice of action for debt, and who has not contracted a rate of interest, may claim prejudgment interest under the Judicature Act at five percent a year calculated simply from the day the debt came due. [ 32 ] If the 5% rate of interest is used in relation to the Convention Centre Loan, the outstanding amount thereon is presently $183,499.53 (Exhibit “C”- Wilson supplemental affidavit). [ 33 ] With this evidentiary background I then turn to answering the relevant questions. [ 34 ] There is no document that sets out the terms of any agreement between the plaintiffs and Mr.

Offman regarding the Convention Centre Loan. There is no email chain confirmation that could substitute in that regard. The evidence suggests that it was Mr. Wilson’s “understanding” that the parties to this $300,000 loan were Mr. Offman personally and Tarman (para. 25, March 2020 affidavit); that there was a “verbal agreement that that loan would be repaid by Mr. Offman within a two-week period following the conclusion of the Hal-Con event” (no details of who Mr. Offman spoke with to confirm the terms of the loan, including who were the intended parties to the Convention Centre Loan is in evidence). [ 35 ] Mr.

Wilson did not himself speak to Mr. Offman, nor does he suggest who Mr. Offman spoke to in order to obtain the Loan; it would appear that Mr. Wilson received an email from Mark McDonald at Olympia requesting [that] “$300,000 be sent to Mr. Offman as vault cash for the Hal-Con event… being held October 26 – 28, 2018” (para. 21 of his March 2020 affidavit). That email chain is contained in Exhibit “G” of Mr. Wilson’s March 2020 affidavit. An examination of that document shows that Mr. McDonald’s email of October 22, 2018 (on which Mr. Wilson was copied) includes the following bolded captions:

Delivery Date : Thursday, October 25 Location : HAL-CON – Halifax Convention Centre, 1650 Argyle St. Hand Deliver to : Stephen Offman at booth #501 Coin Nation .Cell # 902-830-1564 [ 36 ] Notably present is the reference to Coin Nation – which entity is then in existence. In fact, the evidence includes the sponsorship agreement between Coin Nation Inc and HAL-CON SCI-FI FANTASY ASSOCIATION dated July 30, 2018, which Mr. Offman signed as CEO of Coin Nation ATMs Inc. to allow him to take

part in that convention as a sponsor. [ 37 ] I bear in mind as well that counsel for the plaintiff is relying on interest payable, not pursuant to the terms of the asserted Loan agreement, but rather pursuant to CPR 4.03(2). [ 38 ] Without engaging in a precise exercise of answering the relevant questions reiterated in Baypoint Holdings , there clearly are genuine issues of material facts that require resolution by a full hearing of the matter regarding the Convention Centre Loan. (See e.g. Justice Robertson’s reasons in Royal Bank of Canada v 3255177 Nova Scotia Limited , 2018 NSSC 181 , at para 21 .) [ 39 ] I must not grant

summary judgment in relation to the Convention Centre Loan. Conclusion [ 40 ] I am prepared to grant

summary judgment in relation to the Principal Loan in the amount of $34,044.41 (plus costs and reasonable disbursements) in favour of the plaintiffs. [ 41 ] I am not prepared to grant

summary judgment in relation to the Convention Centre Loan. [ 42 ] The plaintiffs therefore request partial

summary judgment (see Proost v Ferncroft Equities Ltd ., 2014 NSSC 99 , at para 27 ). [ 43 ] I conclude that the claims here are separate, distinct and severable from each other. [ 44 ] I am prepared to grant

summary judgment in relation to the Principal Loan. [ 45 ] I dismiss the plaintiffs’ claim for

summary judgment in relation to the Convention Centre Loan. [ 46 ] Under CPR 13.08 I must

schedule a hearing to consider giving directions for the conduct of the action if it is not converted to an application, or on motion of a party or my own motion, convert the action to an Application in Court, set a time and date for the hearing of the Application, and give further directions as called for in Rule 5 – Application [see Justice Fichaud’s reasons in Fougere v Blunden Construction Ltd ., 2014 NSCA 52 ]. [ 47 ] I direct that by May 26, 2021, the parties present their positions to me in writing regarding: 1. whether I should give directions, and if so what directions, per CPR 13.08; and 2. included therewith the parties should confirm their positions regarding what order I should make in relation to “costs” of this motion for

summary judgment, as it relates to both of the loans, since there was divided success on the motion. [ 48 ] I direct the plaintiffs’ counsel to prepare an order to reflect my decision, once the matter of costs is concluded. Rosinski, J.