Court of Appeal for Ontario

Date: 2017-10-02 Docket: C61389 Judges: Hourigan, Brown and Roberts JJ.A

Between

Jayendra Patel Plaintiff (Appellant)

and

Anna Borges Defendant (Respondent)

Counsel

Lana Menon and Darrell Paul, for the appellant

Rolf Piehler, for the respondent

Heard and released orally: September 28, 2017

On appeal from: the order of Justice Mario D. Faieta of the Superior Court of Justice, dated October 28, 2015.

Reasons for Decision

[1] The appellant brought an action to enforce a mortgage registered against a residential property solely owned by the respondent.

[2] The respondent's spouse, who had been borrowing large sums of money from the appellant, signed a promissory note agreeing to register a mortgage against the property in the appellant's favour as security for the loans. However, the respondent testified that she understood that the mortgage was to replace an existing second mortgage and not as a third mortgage to secure her husband's debts. She submitted that the mortgage was unenforceable as she received no consideration.

[3] The trial judge dismissed the appellant's action, finding that the respondent received no consideration for the mortgage and that the purpose of the mortgage was to pay off the existing second mortgage and not to secure the loans made to the respondent's spouse.

[4] The appellant submits that the trial judge erred in finding that the respondent received no consideration for the mortgage and that the purpose of the mortgage was to pay off the existing second mortgage.

[5] We do not accept this submission. The trial judge conducted a thorough review of the evidence and his findings were open to him on the record. For example, the mortgage commitment stated that the security sought was a second mortgage. Further, the respondent signed an acknowledgment and a solemn declaration, both of which indicated that the mortgage was a second mortgage.

[6] We also reject the appellant's argument that the trial judge erred in accepting the respondent's evidence that she believed that the purpose of the mortgage was to replace an existing second mortgage because the new mortgage was only in the amount of $165,000 and the existing second mortgage had a balance of $203,000. The trial judge specifically considered this issue in his reasons at para. 62. He accepted the respondent's evidence that she believed that the amount advanced would be sufficient to discharge the existing second mortgage once certain unreasonable charges in the discharge statement were resolved and removed. This was a finding that was open to the trial judge.

[7] The appellant also submits that the trial judge erred in finding that the respondent was not served with the notice of sale. We are not satisfied that the trial judge erred in so finding. In any event, nothing turns on the issue as the mortgage is invalid and any enforcement actions taken pursuant to it are of no force. Even if she received the notice of sale, the statement of claim was issued approximately one month later. The failure to take steps in that short period does not constitute acquiescence.

[8] The appeal is dismissed. The appellant shall pay costs of the appeal to the respondent in the amount agreed upon of $5,000, inclusive of fees, disbursements, and taxes.

"C.W. Hourigan J.A."

"David Brown J.A."

"L.B. Roberts J.A."