



COURT OF APPEAL FOR ONTARIO

CITATION: Devi Financial Inc. v. Everwood
    Place Ltd., 2022 ONCA 104

DATE: 20220204

DOCKET: C69325

Tulloch, Pardu and Harvison
    Young JJ.A.

BETWEEN

Devi
    Financial Inc.

Moving Party (Respondent)

and

Everwood Place Ltd., Hyde Park
    Crossing Ltd. and Trevor Bond

Responding Parties (Appellants)

Rod R. Refcio and William T.J. Chapman,
    for the appellants

Daniel K. Reason, for the respondent

Heard: January 14, 2022, by video conference

On appeal
    from the judgment of Justice Spencer Nicholson of the Superior Court of Justice,
    dated March 16, 2021.

REASONS
    FOR DECISION

[1]

The appellant Trevor Bond appeals from the summary judgment granted in
    favour of the respondent Devi Financial
Inc. (Devi). The
    motion judge concluded that there was no genuine issue requiring a trial on the
    question of whether the appellant had personally guaranteed the mortgage debt
    lent by Devi.

[2]

The corporate appellants defaulted on a mortgage given by them which was
    ostensibly guaranteed personally by the appellant Trevor Bond.

[3]

The facts may be briefly stated. Everwood
Place Ltd.
    (Everwood)

and Hyde Park
Crossing
    Ltd. (Hyde Park)

are corporations that own two
    separate pieces of property in the City of London. Mr. Bond is the principal of
    both corporations and an experienced and successful businessman. The appellants
    Everwood and Hyde Park granted mortgages over the properties to secure
    financing in the amount of $2,650,000.

[4]

The financing at issue in these proceedings replaced prior financing. In
    September 2018, Devi offered mortgage financing in respect of the two pieces of
    property. Devi agreed to lend $2,650,000 at an interest rate of 11% per annum
    over a one-year term ending in July 2019. As security for the loan, the
    respondent was to receive a first charge/mortgage over each piece of property.

[5]

Devi required that Mr. Bond enter into a guarantee. In the course of the
    negotiations for the financing, he provided a financial disclosure statement to
    Devi which indicated that, as of the end of April 2018, he had a net worth of
    $16,415,000. Mr. Bond also executed a Guarantors Consent to Electronic
    Registration of Charge. The money was advanced, and the charge/mortgage was
    registered on September 17, 2018 for a one year term. The respondent was also
    granted a General Security Agreement, which was duly registered pursuant to the
Personal Property Security Act
, R.S.O. 1990,
    c. P.10 (PPSA).

[6]

The parties subsequently agreed to an extension of the mortgage so that
    it would mature on January 25, 2020. The interest rate was increased to 12% per
    annum, calculated and payable monthly in the amount of $26,500.00 from and
    after July 25, 2019.

[7]

The appellants fell into default of the loan very shortly after the
    parties reached the extension agreement. The respondent gave the appellants a
    number of opportunities to bring the loan into good standing but, while a few
    payments were ultimately made in the fall of 2019, no payments were made after
    November 4, 2019. As of November 25, 2019, the next payment was due.

[8]

The respondent delivered a demand letter dated November 28, 2019,
    containing a statement of amounts necessary to bring the mortgage into good
    standing as of December 10, 2019, along with a Notice of Intention of Enforce
    Security under the
Bankruptcy and Insolvency Act
, R.S.C., 1985, c. B-3,
dated
    November 28, 2019. A Notice of Sale under Charge/Mortgage was delivered to the
    appellants on December 11, 2019, giving them until January 22, 2020, to bring
    the mortgage into good standing.

The Issues

[9]

The appellants raise three arguments on appeal.  We would not give
    effect to any of them for the following reasons.

[10]

First,
    they submit that the motion judge erred in granting summary judgment without
    resorting to the fact finding powers set out in r. 20 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, in
    relation to Mr. Bonds position that he was signing the guarantee as agent for
    the corporations and not on his own behalf.

[11]

It
    is common ground that the motion judge articulated the correct test governing
    the availability of summary judgment:
Hryniak v. Mauldin
,
    2014 SCC 7, [2014] 1 S.C.R. 87.

[12]

The
    appellants argue, however, that he erred in applying the test because in
    finding that Mr. Bond signed as personal guarantor in the face of his evidence
    that he thought he was signing as agent for his corporations, the motion judge
    was making a credibility finding that was unavailable given that he failed to
    rely on any of the fact finding powers under r. 20.

[13]

We
    disagree. The documentation was clear that Mr. Bond was signing as a personal
    guarantor. The task facing the motion judge was the construction of the
    contractual documentation before him, including the loan agreements and the
    guarantee. Any objective interpretation of these documents gives rise to the
    conclusion that Mr. Bond signed as personal guarantor. There is no ambiguity
    that could give rise to the admissibility and relevance of Mr. Bonds personal
    understanding:
Arora v. Whirlpool Canada LP
,
    2013 ONCA 657, 118 O.R. (3d) 113, at para. 24.

[14]

This
    is a matter of straightforward contract interpretation between sophisticated
    and represented parties. The grounds which could give rise to the relevance of
    Mr. Bonds personal understanding of the documentation he signed, such as
non est factum
, misrepresentation, or unconscionability
    or unequal bargaining power were not pleaded. The motion judge correctly found
    that nothing in Mr. Bonds affidavit or cross-examination could have made out
    any such defence. In addition, as the motion judge observed, leave to amend was
    not sought.

[15]

In
    short, the motion judges conclusion that Mr. Bond was liable as a personal
    guarantor was driven by the law on contract interpretation and not by any
    credibility finding with respect to Mr. Bond.

[16]

The
    appellants also submit that the
motion judge erred in
    finding that the amount due to the respondent
was $3,214,264.15 inclusive
    of interest.

[17]

In
    particular, they argue that the motion judge erred in including a bonus of
    three months interest of $93,619.34 as a result of the fact that the 2018
    mortgage was not discharged but rather extended.

[18]

We
    see no error on the part of the motion judge. This too was a simple question of
    contractual interpretation. There was no ambiguity.

[19]

On
    reviewing the respective commitment letters given in 2018 and then in 2019, it is
    clear that the two bonuses were to be triggered by different circumstances.
    The 2019 commitment letter provided that the mortgage could be prepaid if the
    chargor/mortgagor paid three months interest to the chargee/mortgagee. That
    did not occur in this case and so that bonus did not apply. The motion judge
    continued, however, to explain that the 2018 bonus provision as set out in the
    original Schedule did apply:

[75] the bonus set out in the original Schedule is triggered
    (1) if the Charge\Mortgage is not discharged on its maturity, or (2) if it is
    not renewed or extended. The only sensible reading of these clausesin my
    opinion, is that in the event that the defendants did not pay out the loan on
    its maturity date, or agree to extend it to a new maturity date, the bonus
    would be activated. Reading these two provisions together, to avoid the bonus
    the defendants had to discharge the mortgage on its maturity date.

[76]    Thus, the bonus was not
    activated when the parties agreed to the extension in July of 2019. It was,
    however, triggered when the current extension ended and the mortgage was
    neither discharged, nor extended. In my opinion, the bonus is properly included
    in the amount owing to the plaintiff. That is what the parties agreed upon.

[20]

Finally,
    the appellants submit that the motion judge erred in rejecting their argument
    that the respondent failed to provide adequate notice and that the power of
    sale was therefore not available to it.

[21]

This
    submission also fails. The appellants had been in default of payment for more
    than 15 days when the Notice of Sale was sent to it on December 11, 2019. The
    Notice set out the amount outstanding and gave the chargor appellants until
    January 22, 2020, to pay the amounts set out. This was more than 35 days. The
    motion judge made no error in his interpretation of the standard clause, noting
    that it does not require 15 days notice but simply requires that, if the
    chargor is in default of making a payment for at least 15 days, 35 days notice
    can be given until the chargee will enter on and lease or sell the land.

Conclusion and Costs

[22]

For
    these reasons, the appeal is dismissed.

[23]

Given
    the terms of the contract, the respondent is entitled to its costs on a
    solicitor-client basis. Costs of the appeal are payable by the appellants to
    the respondent in the amount of $7,500 as claimed.

M.
    Tulloch J.A.

G.
    Pardu J.A.

A.
    Harvison Young J.A.


