2017 ONSC 914, 2017 ONSC 914

CITATION : Nissan Canada Finance v. Litho, 2017 ONSC 914 COURT FILE NO.: 889/16 DATE: 2017 02 10 SUPERIOR COURT OF JUSTICE – ONTARIO RE: Nissan Canada Finance v. Roland L. Litho and Francois Mudioko BEFORE: Van Melle J COUNSEL: Gregory W. Bowden, for the Plaintiff Francois Kabemba, for the Defendants HEARD: 2017-01-30 E N D O R S E M E N T [ 1 ] The plaintiff moves for

summary judgment for amounts outstanding on a vehicle lease. The third party, RBC General Insurance Company, takes no position on this motion and did not participate. [ 2 ] In July of 2015, the defendant Litho wanted to lease a 2015 Nissan vehicle. He went to Hunt Club Nissan Ltd. in Ottawa and was advised that in light of his credit rating he would require a co-signer. His pastor Francois Mudioko agreed to co-sign. [ 3 ] On July 17, 2015 Litho, with Mudioko as co-signer entered into a contract and leased a 2015 Nissan Sentra.

On the same day the contract was assigned to the plaintiff, with the defendants’ knowledge and consent. In fact, the defendants signed the contract with the plaintiff itself. [ 4 ] The contract stipulated that the Nissan Sentra was valued at $27,000.58 which was to be repaid:

a) By way of 60 monthly payments of $369.16 (for the 60 month term of the contract);

b) At the end of the term, the defendants were to either return the vehicle to the plaintiff or pay a further sum of $7,399.26 representing the residual value. [ 5 ] Jessica Dasilva, an employee of the plaintiff, deposed (and the defendants do not dispute) that after the contract was entered into, it was almost immediately in arrears. The void cheque that Mr. Litho gave the plaintiff was drawn on a closed account and as a result the contract immediately went into default. [ 6 ] On October 6, 2015 Mr. Litho agreed to give the plaintiff a double payment and an extra payment on October 17, 2015.

Litho called the plaintiff on October 6, 2015 to say that he could not make the double payment and wanted the plaintiff to take only the regular payment. As of November 2, 2015, the account remained in arrears. As of January 26, 2016, only two payments had been made on the vehicle since July 17, 2015 and the plaintiff engaged a bailiff to repossess the vehicle. [ 7 ] The car was involved in an accident on January 24, 2016. The plaintiff was advised of this fact on February 10, 2016.

[8] The vehicle was taken from Remoquage Henrie, and sold for $2,695.51. Fees for towing and storage totalled $1,494.68. [9] Nissan claims payment of $31,610.67 pursuant to the lease agreement. [10] Rule 20.04(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides: The court shall grant

summary judgment if, (

a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (

b) the parties agree to have all or part of the claim determined by a

summary judgment and the court is satisfied that it isappropriate to grant

summary judgment.

(2.1) In determining under clause (2) (

a) whether there is a genuine issue requiring a trial, the court shall consider the evidencesubmitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for thepurpose, unless it is in the interest of justice for such powers to be exercised only at a trial: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent. 3. Drawing any reasonable inference from the evidence. [11] The case of Hryniak v. Mauldin, 2014 SCC 7 , 2014 S.C.C. 7, makes it clear that Rule 20 was amended in 2010 toimprove access to justice. Judges are allowed to …adjudicate more cases through

summary judgment motions and attenuate the risks when such motions do not resolve theentire case. …

Summary judgment motions must be granted whenever there is no genuine issue requiring a trial. There will be no genuineissue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for

summary judgment. Thiswill be the case when the process: Allows the judge to make the necessary findings of fact; Allows the judge to apply the law to the facts; and Is a proportionate, more expeditious and less expensive means to achieve a just result. [12] As Justice Goodman said in Miltenberg v. Metro Inc., 2012 ONSC 1063, at paras. 21 – 25: [21] It was well established under the previous incarnation of the

summary judgment rule that in resisting a motion forsummary judgment, a responding party must “lead trump or risk losing”. It is not enough to rest on allegations or denials. Theresponding party must put forth, a specific and organized set of facts which demonstrate the existence of a real issue requiring a trial. [22] When considering a motion for

summary judgment, a Court is entitled to assume that the record before it contains all ofthe evidence which the parties would present if the case were to proceed to trial. Since it is assumed that a complete evidentiary recordis before the court, it is also assumed that each party will have put its best foot forward. [23] Thus, as a judge determining a motion for

summary judgment, I am obligated to take a hard look at the case todetermine if a trial is required. In so doing, I am assuming that I have a full evidentiary record before me. [24] In a motion for

summary judgment, the legal burden rests on the moving party to show that there is no genuine issue fortrial, and this burden never shifts. [25] A party cannot simply rely on allegations in the pleadings or submissions to the Court. A responding party mustestablish, by affidavit, specific facts that show that there is a genuine issue for trial. If there is a genuine issue with respect to materialfacts, then no matter how weak or how strong appear the claim or the defence, the case must be sent to trial. It is not for the motionsjudge to resolve the issue. Matters of law which have not been fully settled should not be disposed of on a motion for

summaryjudgment. [13] The defendants seek to have the motion for

summary judgment dismissed. They bring their own motion for an adjournment ofthe

summary judgment motion and the third party action so that all the parties can participate in cross-examinations and to enable theparties to attend mediation. [14] The defendants submit that there are a number of questions that can only be addressed by way of a trial, namely:

1) What is the amount owing to the plaintiff by the defendants; 2) Is the plaintiff obligated to demand compensation for the vehicle from its own insurer; 3) Is the plaintiff obligated to demand compensation for the vehicle from the defendants’ insurer; 4) The end date of the contract; 5) Whether or not the vehicle was a total loss; 6) Whether or not the plaintiff can charge interest of 18%; 7) Prior to the determination of the amount owed by the defendants there must be a determination of the amount payable by the third party.

Amount owing to the plaintiff by the defendants [ 15 ] The amount owing under the contract is easily calculated. [ 16 ] The lease termination provisions are at paragraph 7 of the lease agreement. The relevant portion is Total Loss of vehicle: If the Vehicle is lost, stolen and not recovered, destroyed or damaged beyond repair (as determined by us or your insurer) you (or your insurer on your behalf) will purchase the Vehicle for the total of the following: The Total Monthly Payment TIMES the number of monthly payments not yet due, as applicable, PLUS The Residual Value of the Vehicle; plus applicable taxes.

PLUS Any deductible amount under your insurance coverage, PLUS Any other amounts due under this Lease (including any overdue Total Monthly Payments or any overdue Total Prepaid Lease Payment, as applicable, but not including charges for excess kilometres or abnormal wear and tear) plus applicable taxes, PLUS An early termination fee of $500, plus applicable taxes, payable to NCF, MINUS Any monies received by us in respect of the loss, theft, destruction or damage beyond repair under any insurance policy on the Vehicle, including any premium refunds, that have not been used to replace the Vehicle.

MINUS The unearned portion of the Lease Charges calculated by us, plus applicable taxes, MINUS Any portion of the Security Deposit left after deductions permitted by this Lease (if any), MINUS The amount (if applicable) of your GAP [Guaranteed Asset Protection]. [ 17 ] This amount is readily ascertainable and is calculated as follows: Balance owing as at September 17, 2015 $26,659.56 Less: Net Sale price of vehicle 1,200.83 Balance owing 25,458.73 Accrued interest to January 30, 2017 6,151.94 Total owing at January 30, 2017 31,610.67 Is the plaintiff obligation to demand compensation for the vehicle from its own insurer [ 18 ] The defendants raise the issue of a “secret” insurance payment received by the plaintiff from its own insurer.

This issue was raised for the first time in argument on this motion. I am not going to give any credence to this submission as there is absolutely nothing in the record to support this allegation. It is improper to raise a serious allegation such as this only in argument, as it does not give the responding party an opportunity to deal with an issue of this nature. [ 19 ] Again, the contract deals with the insurance issue and nowhere does it state that there is an obligation on the plaintiff to demand compensation from its own insurer.

Is the plaintiff obligated to demand compensation for the vehicle from Litho’s insurer [ 20 ] The defendants’ position that the plaintiff must pursue Litho’s insurer, the third party, RBC, before it is permitted to continue with its action against the defendants is, in my view, ill founded. If

summary judgment is granted in favour of the plaintiff there is no

reason that the defendants cannot continue with their claim against the third party. [ 21 ] The contract between the parties specifically states that the vehicle will at all times during the lease term be at the risk of the defendants. [ 22 ] The plaintiff chose not to pursue the insurer because one of the defendants told the plaintiff that the vehicle was damaged in an accident while being driven by a drunk driver.

It later turned out that the insurer had an altogether different defence to the third party action, namely, that it had cancelled the policy before the accident even occurred, due to the defendants’ failure to pay insurance premiums. It also turned out that the story of a drunk driver may have been false as well, but the defendants do not explain, nor do they deny, having told this to the plaintiff. [ 23 ] In support of its position that it has no obligation to pursue the defendants’ insurer, the plaintiff points to the case of Excelease v.

Preobrazenski , 2001 CarswellOnt 4416 , a case which involved a claim for non-payment of a debt arising from a vehicle lease. The vehicle was insured, and the plaintiff lessor was a named insured under the policy. The defendant lessees failed to make monthly payments and later reported that the vehicle had been stolen. When the plaintiff sued the defendant for breaching the lease, the defendant alleged that the plaintiff failed to take steps to mitigate its loss by pursuing the insurer.

The court noted, at paragraph 21, It can be said that had the plaintiff successfully sued [the insurer] under the policy, its damages against the defendant would have been reduced. However, it is not correct to say that by failing to sue [the insurer] to completion, the plaintiff has created a loss which could have been avoided altogether.

I would therefore be inclined of the view that the plaintiff’s duty to mitigate does not include an obligation to sue [the insurer] on the policy. [ 24 ] As well, the court noted that the defendant had commenced his own action against the insurer which, if successful, would indemnity the defendant for any judgment the plaintiff obtained against him. End date of the contract [ 25 ] The end date of the contract can be readily ascertained from the contract itself.

Once the contract was breached by the non- payment of the lease payments and by the motor vehicle accident, the termination provisions of the contract came into effect. Was the vehicle a total loss [ 26 ] The defendants take issue with the sale price obtained by the plaintiff at public auction. They assert that the damage to the vehicle was relatively minor. In support, they have an estimate from Collision Gauthier dated January 10, 2017 which was based on photographs.

The estimate is subject to: “when taking a part the may be surprised if more part damage will be extra and labour [sic].” The estimate is unreliable and in any event the plaintiff was not obligated to turn the vehicle over to the defendants for them to repair. [ 27 ] After being notified of the accident, the plaintiff contacted the towing company, Remorquage Henrie, and sent its agent, Adesa, to inspect the vehicle. Adesa noted that there was severe damage to the front bumper cover, front hood, right fender and right front door. It noted that the front left airbag and right side curtain airbag had both deployed.

It noted as well dents and paint damage to the rear door and a broken right front wheel. [ 28 ] The evidence adduced by the plaintiff discloses a badly damaged vehicle. [ 29 ] In Royal Bank v. 2021847 Ontario Limited , 2008 CarswellOnt 5261 , the Court of Appeal said that it is not enough for a defendant merely to criticize the sale price in order to sustain a claim of improvident sale. Instead, a defendant must adduce “substantial evidence in support of its defence.” [ 30 ] The defendants admit that the plaintiff issued a notice of intention to sell the vehicle.

They say it was not a genuine notice as the plaintiff obtained default judgment against Mudioko around the same time (the default judgment was subsequently set aside). The plaintiff alleges and I accept that it was still open to the defendants to act on the notice if they so wished. They would have had to bring the lease current and get the vehicle out of storage. They did not do so and the vehicle was sold on April 21, 2016. Can the plaintiff charge 18% interest [ 31 ] The interest charge is set out at paragraph 13 and says: Late payments.

Interest will accrue on all amounts payable under the Lease (including interest) not paid when due, both before and after judgment, at a rate of 18% per annum. You will pay to us, on demand, all of such interest. Prior to the determination of the amount owed by the defendants there must be a determination of the amount payable by the third party [ 32 ] The defendants have submitted case law in support of their submission that this action must be heard with the third party action. [ 33 ] That case law however, is not on point with the case at bar. The actions in this case are not interwoven.

It is possible to make a finding against the defendants without the involvement in this motion by the third party. [ 34 ] The questions that the defendants submit can be answered at trial, are in fact answerable without a trial. This is exactly the situation envisioned by Rule 20 and by the Supreme Court in Hryniak .

[ 35 ] While the defendants take issue with parts of the two agreements that they signed, they do not dispute that they entered into the agreements. Their

interpretations of the value of the vehicle; the amounts that were due under the lease and the interest accruable under the lease are simply false and not sustainable upon a reading of the agreements. [ 36 ]

Summary judgment in favour of the plaintiff will issue. [ 37 ] At the end of the argument of the motion, the plaintiff asked if I would hear cost submissions and came prepared with a Costs Outline which had been provided to the defendants ahead of time.

The defendants were not prepared to argue the issue of costs, despite Rule 57.01(6) which stipulates: Unless the parties have agreed on the costs that it would be appropriate to award for a step in a proceeding, every party who intends to seek costs for that step shall give to every other party involved in the same step, and bring to the hearing, a costs outline (Form 57B) not exceeding three pages in length. [ 38 ] Rule 57.01(6) is repeated in the Central West Consolidated Practice Direction. [ 39 ] Mr. Kabemba, counsel for the defendants, was permitted to attend the motion by way of telephone conference.

I extended to him an opportunity to send me his costs outline by fax or e-mail. I was also prepared to give him 90 minutes over the lunch break to prepare a costs outline. He declined to do so, saying that he had been ill (and indeed his factum was filed at the last minute and was over the prescribed length). The plaintiff’s motion and factum were served on the defendants on January 3, 2017 which would have given counsel sufficient time to prepare and serve his responding materials and responding factum.

It would have provided sufficient time as well to provide a costs outline pursuant to the Rules. [ 40 ] Given that I have ruled in favour of the plaintiff, I will allow the defendants 10 days to provide their response to the plaintiff’s costs submissions. If the plaintiff wants to reply to the defendants’ submissions it has a further 15 days within which to do so. ___________________________ Van Melle, J DATE: February 10, 2017 CITATION : Nissan Canada v. Roland Litho et al, 2017 ONSC 914 COURT FILE NO.: 889/16 DATE: 2017 02 10

SUPERIOR COURT OF JUSTICE – ONTARIO RE: Nissan Canada Finance v. Roland L. Litho and Francois Mudioko BEFORE: Van Melle, J. COUNSEL: Gregory W. Bowden, for the Plaintiff Francois Kabemba, for the Defendants ENDORSEMENT Van Melle, J. DATE: February 10, 2017