Executive Summary: Key Legal and Evidentiary Issues

• Appropriateness of partial summary judgment in the context of the entire litigation.

• Whether the counterclaim by Amazing Print, Corp. is statute-barred due to the limitation period.

• Sufficiency of evidence establishing liability against the individual Defendants by Counterclaim.

• Existence of genuine issues for trial regarding the financial relationships and commissions among the parties.

• Adequacy of evidence to pierce the corporate veil and attach personal liability to individual defendants.

• Impact of ongoing business dealings and communications on the discoverability of claims under the Limitations Act.

Facts of the case

Reuben Benquesus brought an action against Amazing Print, Corp. for the recovery of a $250,000 debt. This debt arose from a Securities Purchase Agreement dated January 21, 2009, under which Amazing Print agreed to sell Benquesus 33 common shares, representing 25% of Amazing Print, for $250,000. On the same date, Racad Tech, with Benquesus as its sole director, and Slava Apel, the principal of Amazing Print, entered into an Option Agreement for Apel to purchase 8,333,333 shares in Racad Tech for $650,000. The business relationship involved several related parties, including family and friends of Benquesus and various corporate entities connected to him.

A central document in the main action is an Acknowledgement dated August 1, 2013, signed by Benquesus on August 26, 2013, and by Apel on behalf of Amazing Print on September 9, 2013. This Acknowledgement states that Amazing Print acknowledges an outstanding debt of $250,000 principal, plus interest at prime plus 2%, and that the debt will be paid when Amazing Print is able to do so, not to exceed five years. The Acknowledgement also contains a repayment schedule. The debt set out in the Acknowledgement has not been paid, and Benquesus seeks recovery of that debt in the main action.

Counterclaim and related parties

Amazing Print defended the main action and filed a counterclaim. Amazing Print asserts that the action is not about the repayment of a loan, but rather alleges that it was the victim of a scheme by Benquesus and the Defendants by Counterclaim to misappropriate income-producing assets of Amazing Print. The Defendants by Counterclaim include family, friends, and businesses of Benquesus. Amazing Print also alleges that it was owed over $85,000 for sales commissions from accounts acquired by Amazing Print for the benefit of the Print Three, Racad, Eden Advertising & Interactive Defendants by Counterclaim.

The Counterclaim was discontinued as against John Wiseman. The court found that there was no genuine issue for trial in respect of Ney Bendayan, Andrew Hrywnak, Esther Willinger, and Jacques Benquesus (Jack Banks), and the Counterclaim as against those Defendants was dismissed.

Policy terms and limitation period

A key issue was whether the counterclaim was statute-barred. The court considered the ongoing communications between the parties’ bookkeepers about commissions owed as late as April 23, 2019, just days before the Counterclaim was issued. The court found that, due to the interrelated nature of the parties and their dealings that continued into 2019, there is a genuine issue for trial relating to the limitation period and that partial summary judgment on this issue was not appropriate.

Analysis of liability and summary judgment

The court found that Amazing Print offered little evidence and much speculation regarding the involvement of certain individual Defendants by Counterclaim. The court concluded that there was no genuine issue for trial as against the individual Defendants Ney Bendayan, Andrew Hrywnak, Esther Willinger, and Jacques Benquesus (Jack Banks), and granted partial summary judgment dismissing the Counterclaim against them. However, the court found that there were genuine issues requiring a trial regarding the corporate Defendants and the remaining parties, particularly concerning the financial relationships and commissions owed.

Ruling and outcome

The motion for partial summary judgment was granted in part. The Counterclaim was dismissed as against the Defendants Esther Willinger, Jack Banks, Andrew Hrywnak, and Ney Bendayan. The Counterclaim will proceed as against the remaining Defendants to the Counterclaim. The parties were directed to attempt to resolve costs, with a process for written submissions if agreement could not be reached. The parties were also directed to establish a timetable to get the matter to trial, or seek a case conference if agreement could not be reached. No exact amount was ordered or awarded at this stage, as the main action and the remaining Counterclaim are set to proceed to trial. The successful parties on this motion were the individual Defendants who were dismissed from the Counterclaim, but the overall monetary outcome will be determined at trial.