Sheth v. Randhawa, 2022 ONCA 89

Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20220128 DOCKET: M53070 (C69649)

Simmons J.A. (Motions Judge)

BETWEEN

Lovera Sheth Plaintiff (Appellant/Moving Party)

and

Karanpaul Randhawa, TSD Law Professional Corporation, Anoop Singh Dhillon, Bindaas Capital, Ash Karia, Sujoy Pal, Dr. Mangesh Inamdar Medicine Professional Corporation, 11035738 Canada Inc., Shan Mangal and Gurpal Singh Defendants (Respondents/Responding Parties)

Counsel: Doug LaFramboise, for the moving party Demetrios Yiokaris, for the responding parties Anoop Singh Dhillon and TSD Law Professional Corporation Aaron Hershtal, for the responding party Karanpaul Randhawa Paul Robson, for the responding parties 11035738 Canada Inc., Shan Mangal and Gurpal Singh Matthew Harris, for the responding parties Ash Karia, Bindaas Capital, Sujoy Pal and Dr. Mangesh Inamdar Medicine Professional Corporation

Heard: January 20, 2022 by video conference

Endorsement

Introduction

1The moving party/appellant, Lovera Sheth, requests an order: i) setting aside the Registrar's order dismissing her appeal for delay, and ii) granting her seven days from the date of the order on this motion to perfect her appeal. [1]

2The order under appeal was made on a motion the appellant brought in her underlying action to set aside a transfer of property and/or for damages. The motion judge treated the appellant’s motion as a motion for partial summary judgment. She dismissed the appellant’s motion and granted reverse summary judgment in favour of the responding parties dismissing the appellant’s action.

3For the reasons that follow, I grant the appellant's request subject to conditions as set out below.

Background

4On March 9, 2020, Bindaas Capital (“Bindaas” or the “chargee”) and Brinder Nagra [2] transferred the subject property to 11035738 Canada Inc. (“1103” or the “purchaser”) pursuant to a power of sale contained in the first charge against the property.

5The property transferred was the appellant's residence. It is undisputed that she remains in the home to date. She acquired the property in 2017 and granted or assumed first and second charges to Bindaas and others, [3] and Bindaas, for $610,000 and $160,000, respectively, at that time. There was also a third charge registered at the time in favour of Park Lane Plumbing Limited (“Park Lane”), apparently for $90,000. A fourth charge, apparently for $45,000, was later registered against the property in August 2019 in favour of Doris Joseph.

6The appellant asserts that she did not learn of the March 9, 2020 transfer until May 2020. Soon after learning of the transfer, she commenced the underlying action and brought a motion, originally returnable on May 21, 2020, to set aside the transfer.

7In her action, among other things, the appellant sought a declaration that the March 9, 2020 transfer was fraudulent, an order reversing the transfer and re‑registering the property in her name, and damages for loss of equity. In her motion, at least as originally framed, the appellant asked, among other things, that the March 9, 2020 transfer be deemed a nullity and that the property be re‑registered in her name.

8Following cross-examinations, the appellant’s motion in some form [4] was heard on June 9, 2021. On the hearing date, the appellant sought an adjournment to conduct a further examination of Ash Karia, the principal of Bindaas. The responding parties opposed the request. The motion judge denied the adjournment for reasons provided orally.

9The motion judge released her endorsement concerning the merits of the motion on June 14, 2021. According to the June 14, 2021 endorsement, the appellant argued that the responding parties (primarily, the chargee and the chargee’s solicitors (Mr. Randhawa) and the purchaser and the purchaser’s solicitors (TSD Law Professional Corporation and Mr. Dhillon)) engaged in a conspiracy to defraud her and take her property from her; and further, that the notice of sale issued by Bindaas was invalid and that the transfer was therefore a nullity.

10In her June 14, 2021 endorsement, the motion judge dismissed the appellant's motion and granted reverse summary judgment to the responding parties dismissing the appellant's action subject to the appellant’s right to proceed with an accounting against Bindaas and its principal, Mr. Karia and subject also to the right of the purchaser to apply for payment out of $40,000 the appellant paid into court pursuant to an order made by Andre J.

11The appellant filed her notice of appeal dated July 13, 2021 on July 14, 2021. Under rule 61.09(1)(a), the appeal should have been perfected on or before August 13, 2021.

12On August 16, 2021, the Registrar of this court sent a notice to the appellant advising her appeal would be dismissed unless perfected by September 7, 2021. The Registrar subsequently dismissed the appellant's appeal on November 5, 2021. Appellant’s counsel apparently received notice of the dismissal on November 9, 2021.

13The appellant’s set aside/extension motion is dated November 24, 2021. Appellant’s counsel sought to make it returnable on December 6, 2021. However, due to the unavailability of the purchaser’s lawyer for any dates in December the motion was brought returnable on January 20, 2022.

Chronology of the Chargees’ Enforcement Proceedings and the Appellant’s Action

14The following chronology [5] of the chargees’ enforcement proceedings and of the appellant’s action is relevant to the issues on this motion:

• July 2018, the appellant defaulted under the first and second charges to Bindaas and others, and Bindaas;
• July 30, 2018, Bindaas issued a notice of sale under charge with respect to the second charge requiring payment by September 5, 2018;
• July 30, 2018, Bindaas commenced an action to enforce the second charge;
• February 15, 2019, Bindaas and others issued a notice of sale under charge with respect to the first charge requiring payment by April 5, 2019;
• March 8, 2019, Bindaas and others commenced an action to enforce the first charge; [6]
• December 4, 2019, the appellant and the first and second chargees (Bindaas and others, and Bindaas) entered into Minutes of Settlement requiring the appellant to pay $893,000 within seven days in full and final settlement of the actions to enforce the first and second charges. In default of payment, the chargees were entitled to sign judgment for $927,465.33 representing the full amount due under the first and second charges;
• January 2020, the appellant listed the property for sale;
• January 29, 2020, the appellant entered into an agreement to sell the property to Bobby Abraham for $1,000,000 with a closing date of February 28, 2020;
• February 13, 2020, following default in payment under the Minutes of Settlement, the first and second chargees obtained judgment [7] for $927,465.33 plus $3,127.74 for costs;
• February 26, 2020, the chargee’s lawyer (Mr. Randhawa) received a message from the appellant’s lawyer’s office that the property had been sold for $1,000,000 but did not receive a copy of the agreement of purchase and sale;
• unknown date, the appellant requested a discharge statement for the charges; [8]
• February 27, 2020, 1103 offered to purchase the property “as is” for $970,000. The offer was accepted with a closing date of March 4, 2020. (The agreement is not in the record on this motion. Para. 23 of the motion judge’s reasons does not refer to Brinder Nagra as being a party to this offer);
• February 28, 2020, Bindaas’ real estate solicitor (Mr. Devesh Gupta) sent the appellant’s real estate solicitor (Mr. Manish Kapoor) a discharge statement for the charges for $980,272. Upon being advised this amount was disputed, Mr. Randhawa advised he was no longer retained on the matter;
• February 29, 2020, in response to inquiries about the discharge statement, both Mr. Randhawa and Mr. Gupta advised they were not retained by Bindaas for purposes of the discharge of the charges;
• March 4, 5, and 6, 2020 – 1103’s purchase is postponed each day, finally, on March 6, 2020 to March 9, 2020;
• March 6, 2020, on motion by the appellant, Harris J. fixed the amount required to discharge the first and second charges at $932,211.73 less $5,000 on account of costs;
• March 9, 2020, 1103’s purchase closed and the transfer, under the power of sale contained in the first charge, from Bindaas and Nagra to 1103 was registered;
• March 9, 2020, 1103 registered a charge against the property in favour of Gurpal Singh for $880,000;
• March 16, 2020, on motion by the appellant, Bloom J. fixed the amount required to discharge the first and second charges at $929,498.01 less $3,500 on account of costs and ordered that on payment into court the charges would be discharged;
• May 7, 2020, Bobby Abraham paid $920,988 into court (of which $800,000 was borrowed from the National Bank) and also paid $51,000 to discharge the third charge in favour of Park Lane – commencing May 1, 2020, the appellant began paying Bobby Abraham $3,131 per month on account of the National Bank loan;
• unknown date, Mr. Mangal visited the property and discovered that the appellant was still occupying it: para. 38 of the motion judge’s reasons;
• May 12, 2020, Anthony Forgione of Apex Property Management delivered a Notice of Trespass to the occupants of the property on behalf of 1103 requiring them to vacate on or before May 17, 2020. The Notice stated it was “further to previous notice provided to you to vacate the premise.”;
• May 13, 2020, the appellant issued her statement of claim;
• May 19, 2020, 1103 registered a second charge against the property in favour of Kuldip Singh Dhillon for $262,500;
• July 22, 2020, the date of Mr. Randhawa’s Statement of Defence and Crossclaim;
• July 28, 2020, the date of Mr. Dhillon and his law firm’s Statement of Defence and Crossclaim;
• July 30, 2020, the date of the Statement of Defence and Counterclaim and Crossclaim of Bindaas and other chargees and Mr. Karia;
• November 20, 2020, the purchaser replaced its previous financing with new first and second charges in the principal amounts of $900,000 and $100,000 respectively (I am unclear whether this information was before the motion judge as the details of these charges are set out in a supplementary motion record dated January 13, 2022 filed on this motion by the purchaser and its principal (Mr. Mangal));
• November 24, 2020, the purchaser and its principal (Mr. Mangal) moved for an order requiring the appellant to pay into court all expenses and costs associated with her continuing occupation of the property, or, in the alternative, for a writ of possession; [9] the appellant brought a cross-motion seeking a declaration that the March 9, 2020 purported purchase was fraudulent; Andre J. ordered that the cross-motion [10] be heard on June 9, 2021 and that the appellant pay into court $40,000 to be held in trust pending the outcome of the cross-motion;
• February 2, 2021, the date of the Statement of Defence and Counterclaim and Crossclaim of 1103, its principal and Mr. Singh, the original first chargee following the sale to 1103;
• March 16, 2021, the National Bank obtained a consent order for payment out of the monies paid into court by Bobby Abraham;
• June 9, 2021, the appellant’s motion was heard;
• June 14, 2021, the motion judge issued her endorsement;
• July 14, 2021, the appellant filed her notice of appeal;
• August 13, 2021, the purchaser and its principal brought a motion requesting a writ of possession for the subject property; Woollcombe J. rejected the appellant’s position that the motion judge’s order was automatically stayed by the appeal; although she found an evidentiary basis existed for issuing a writ of possession under rule 60.10, in light of the appeal and the prejudice the appellant would experience if improperly evicted, she accepted the appellant’s proposal to pay $4,500 per month rent to the purchaser pending disposition of the appeal commencing September 1, 2021 and directed that in default of payment a writ of possession would issue.

The test for setting aside an administrative dismissal for delay and extending the time for perfection

15The test on a motion of this kind is well-established. The ultimate question is whether the justice of the case warrants the order requested. Factors to be considered in making the decision are: (i) whether the appellant formed an intention to appeal within the appeal period; (ii) the length of the delay; (iii) the explanation for the delay; (iv) the merits of the proposed appeal; and (v) prejudice to the responding parties. See, for example, Paulsson v. University of Illinois, 2010 ONCA 21, at para. 2; Krawczynski v. Ralph Culp and Associates Inc., 2019 ONCA 399, 69 C.B.R. (6th) 163, at para. 9; Frey v. MacDonald (1989), 33 C.P.C. (2d) 13 (Ont. C.A.), at p. 14; Enbridge Gas Distribution v. Froese, 2013 ONCA 131, 114 O.R. (3d) 636, at para. 15.

Discussion

Criteria (i), (ii) and (iii) - Timeliness and Explanation for the delay

16There is no issue that the appellant satisfied the first criterion of the test on this motion, having served her notice of appeal within the appeal period.

17Relying on rule 61.09(1)(b), appellant’s counsel argued that because the appellant wished to raise issues on appeal about the denial of the adjournment request and was therefore required to obtain a transcript of the motion judge’s oral reasons, the time for perfecting this appeal should have been extended to 60 days after the transcript was filed.

18I reject this submission. Rule 61.09(1)(b) applies where a transcript of evidence is required for the appeal. No oral evidence was called on the motion. Rule 61.09(1)(b) does not apply. If the appellant required additional time to perfect to obtain a transcript of any submissions and the motion judge’s oral reasons for refusing the adjournment request, the proper course was to move for an extension of the time to perfect prior to the dismissal for delay.

19The responding parties contend that the delay in this matter amounts to five months and is inordinate; that the evidence demonstrates that the appellant did not maintain a consistent intention to appeal throughout that period; and that the appellant has not provided an adequate explanation for her delay: Codina v. Canadian Broadcasting Corporation, 2020 ONCA 116, at paras. 2 and 4; Dupuis v. Waterloo (City), 2020 ONCA 96, at paras. 3-5.

20I conclude that the period of delay is just short of four months, being the period from August 13, 2021, the date the appellant should have perfected, to December 6, 2021, the first date on which the appellant was prepared to proceed with this motion.

21In support of their position on delay, the responding parties submit that appellant’s counsel ignored six written requests over five months to perfect the appeal and settle the form of the order under appeal. They also note that the appellant did not order the transcripts of the motion hearing until August 9, 2021, almost two months after the motion judge’s reasons were released; did not advise responding parties’ counsel that transcripts had been ordered until October 26, 2021; and did not move for an extension of time to perfect in response to the Registrar’s warning. Further, the appellant did not obtain the opinion of value she seeks to adduce as fresh evidence until November 2021, which was after her appeal was dismissed for delay.

22I agree that the appellant did not move efficiently or with dispatch in attempting to perfect this appeal. However, I do not accept that the evidence demonstrates that she abandoned her intention to appeal at any point or that the delay in this case should be characterized as inordinate or point strongly to the dismissal of this motion.

23I reach my conclusions for the following reasons. First, in my view, an assessment of the various factors requires a contextual approach. Each factor must be considered in the context of the overall circumstances of the case and may carry more or less weight in a particular case depending on the circumstances. Second, the record in this case suggests that appellant's counsel believed, albeit incorrectly, that the time for perfecting the appeal was governed by rule 61.09(1)(b). Third, to date, this action has not proceeded at a torrid pace. The appellant commenced her action in March 2020 and judgment was granted on a partial summary judgment motion initiated by her in June 2021. The responding parties point to procedural missteps on the part of the appellant. However, I see no indication in the record that the responding parties attempted to bring this matter to fruition more quickly. Fourth, while the responding parties maintain they were anxious to have the appeal move forward, they failed to demonstrate any urgency when consulted about scheduling this motion. The appellant was prepared to bring this motion on December 6, 2021, but in mid-November, the purchaser’s counsel indicated he had no December dates.

24No doubt appellant’s counsel could and should have proceeded towards perfection in a more efficient manner. However, considered in the context of the overall pace of this litigation, I do not consider that the approximately four months of delay should be characterized as inordinate or that counsel's mistaken understanding of rule 61.09 should be visited on the appellant to justify refusing the requested relief.

Criteria (iv) - Merits of the Appeal

25The responding parties submit that the merits of the appeal are weak at best, or non-existent. They point to the motion judge’s detailed reasons and findings of fact; to her conclusion that most of the traditional badges of fraud are absent from the circumstantial evidence; and to the standard of review and the inherent difficulty of overturning findings of fact and findings of mixed fact and law on appeal. In addition, they underline the importance of the motion judge’s following specific findings:

i) the appellant’s agreement to sell the property for $1,000,000 in February 2020 reflected fair market value (thus a sale involving no commissions for $970,000 in the same time frame did not run afoul of the chargee’s obligations);

ii) the potential badge of fraud of secrecy (i.e., the chargee’s failure to advise the appellant of its pending sale) was explained by four factors: a) a reasonable belief, based on past experience, that the offer the appellant had secured for the sale of the property was an effort to delay the chargee; b) a reasonable belief that such offer had expired; c) a reasonable belief based on past experience and the fact that the appellant was still living on the property that she would attempt to thwart the chargee’s intended sale through some form of injunctive proceedings; and d) the absence of any professional obligation on the part of the chargee’s lawyer to disclose the sale to the appellant; and

iii) the potential badge of fraud relating to the haste with which the power of sale was conducted was negated by several factors: a) the period of time during which the appellant had been in default under the charge (since July 2018); b) the appellant’s failure to comply with Minutes of Settlement in the actions on the covenant in the charges under which Bindaas had given her an opportunity to refinance; c) the reasonable belief that the offer the appellant had obtained was a stall or had expired; and d) the reasonable desire in all the circumstances to get on with enforcing the charge.

26In addition, the responding parties submit there is no basis to overturn the motion judge’s ruling that the valuation evidence tendered by the appellant following cross-examinations was not admissible on the motion. Finally, they submit that the appellant will not succeed on any proposed fresh evidence application. The valuation evidence proposed to be submitted could and should have been tendered on the June 9, 2021 motion. Similarly, even assuming it could constitute fresh evidence, the decision in Di Trapani v. 9706151 Canada Ltd., 2019 ONSC 7311 was available well before June 9, 2021.

27I agree that the appellant is unlikely to succeed in any proposed fresh evidence application or in overturning the motion judge’s ruling that the tendered valuation evidence was inadmissible. I also agree that, given the findings made by the trial judge, the appellant faces an uphill challenge on appeal. Nonetheless, I am satisfied that the appellant has arguable grounds of appeal concerning whether the motion judge properly weighed the evidence concerning potential badges of fraud and fair market value to support her summary dismissal of the appellant’s claims for damages and/or a reconveyance of the property based on fraud and conspiracy.

28Several of the appellant’s grounds of appeal relate to how the motion judge weighed the evidence concerning the inferences to be drawn from aspects of the responding parties’ conduct in completing the power of sale, including the following:

• failing to list the property on an MLS listing service;
• entering into a sale agreement on February 27, 2020, which was the day before the appellant’s proposed sale to Abraham was scheduled to close, knowing of the Abraham agreement of purchase and sale;
• entering into a sale agreement with a rushed closing date;
• failing to advise the appellant of the impending sale in order to avoid the possibility of injunction proceedings;
• providing an inflated discharge statement, which “scuttled” the Abraham sale;
• failing to advise the appellant or the subsequent chargees that the property had been sold for a considerable period after the sale was completed;
• the purchaser’s failure to inspect the property;
• the purchaser’s intention to “flip” the property for a profit;
• the fact that within just over two months after completing the purchase, 1103 had increased the charges registered against the property to a total of $1,142,500, almost $175,000 more than it paid for the property.

29In many cases, the manner in which a first instance judge weighs evidence will be immune from appellate review. In this case however, the motion judge appears to have premised her analysis of the responding parties’ conduct, at least in part, on the traditional badges of fraud generally associated with conveyances made to avoid creditors. Some of those factors appear to have little or no application to assessing the bona fides of a sale to a third party under a power of sale contained in a charge.

30For example, the following factors referred to by the motion judge appear to be of little relevance: whether the vendor remained in possession and continued to use the property as his own; whether the transfer was made in the face of threatened legal proceedings; and whether the transfer documents contained false statements.

31Further, I consider it open to question whether the trial judge assessed the evidence bearing in mind the particular context of power of sale proceedings and a chargee’s duties in that context, potentially calling into question the motion judge’s explanations for excusing the secrecy and haste of this transaction. As an example, it may be questionable whether protracted prior court proceedings in relation to a chargee’s claim for payment on the covenant can in any way relieve a chargee from its obligations when subsequently exercising a power of sale, or serve as an explanation for secrecy and haste in conducting the power of sale. A mortgagee/chargee’s obligation when selling under power of sale has been described generally as an obligation to take “reasonable precautions to obtain the true market value of the property as of the date of the sale”: Centurion Farms Ltd. v. Citifinancial Canada Inc., 2013 ONCA 79, at para. 4. See also Gowling Lafleur Henderson LLP, Marriott and Dunn: Practice in Mortgage Remedies in Ontario, looseleaf, 5th ed. (Toronto: Carswell, 1995), c. 33. It may be questionable whether the motion judge assessed the secrecy and haste with which the sale to 1103 was carried out taking account of the chargee’s obligation in carrying out a power of sale.

32Similarly, the motion judge appeared to give little or no weight to the failure of the chargee to obtain a judgment for possession, a writ of possession and ultimately vacant possession of the property prior to sale; the failure of the chargee to list the property on a multiple listing service; and to the purchaser’s evidence that he “assess[ed] the situation similarly to how one would assess a salvaged car”. None of these features of this transaction create confidence that the chargee obtained a proper price.

33Further, when discussing the “traditional badges of fraud”, the motion judge noted that “1103 was a bona fide purchaser that has repeatedly tried to take possession of the property.” In making that observation, the motion judge appears to be assuming there is nothing out of the ordinary about a purchaser under a power of sale having to take steps to obtain possession of the property.

34That is not only a questionable assumption, it may overlook a problem that other judges in this matter may also have overlooked, namely, that it is not open to a purchaser to simply move under rule 60.10 for leave to issue a writ a possession. I will discuss this further under the next heading. I simply note that the failure of a chargee to deliver vacant possession on closing, when exercising a power of sale, does not create confidence that the chargee obtained a proper price.

35In the result, while I acknowledge that the appellant faces an uphill climb on appeal, I am satisfied she has arguable grounds of appeal. Moreover, I observe that, in general, it is desirable that cases be determined on their merits where possible rather than being dismissed over procedural shortcomings.

Criteria (v) - Prejudice to the Responding Parties

36The responding parties point to their inability to collect the costs ordered payable to them by the motion judge ($140,000) together with the carrying costs being incurred by the purchaser in relation to the property (approximately $7,600 per month) as well as the purchaser’s inability to obtain a writ of possession pending appeal as supporting their position that the appellant’s motion should be dismissed.

37I am not persuaded that these arguments point strongly to dismissing the appellant’s motion.

38The responding parties' entitlement to costs is dependent on the outcome of the appellant’s appeal.

39In failing to insist on or confirm vacant possession on closing, in the context of a power of sale of a residential dwelling, the purchaser assumed the risk of being unable to obtain vacant possession and the prospect of a legal proceeding and all the steps that proceeding might entail. In my view, it is not open to the purchaser to claim that the consequences of that decision, and its decision to heavily mortgage the purchased property, in part by placing an additional charge before it had obtained vacant possession, should determine whether the appellant should be entitled to proceed with her appeal.

40If anything, the quantum of the carrying costs and the purchaser’s failure to require vacant possession on closing may raise questions about the bona fides of the transaction.

41I observe, in addition, that the record before me does not demonstrate that the chargees or the purchasers have taken any of the steps necessary to put the purchaser in a position to promptly obtain court enforced possession of the property.

42The statements of claim issued by the chargees to enforce the first and second charges are not in the record. Although I consider it possible, even likely, that they included claims for possession of the charged property, that is not clear. If they included such claims, their failure to obtain an order for possession prior to the sale of the property is unexplained.

43Further, based on my review of the record, it is not clear that either chargee could now seek an order for possession. As noted above, in footnote 6, the first chargee’s statement of claim may have been issued in contravention of s. 42(1) of the Mortgages Act, R.S.O. 1990, c. M.40. Now that the second chargee’s charge has been extinguished by the power of sale, it is not clear to me that an order for possession could be issued in the second chargee’s action.

44In addition, nothing in the record suggests that the purchaser has commenced a proceeding that would entitle it to obtain an order for possession of the property and thereafter a writ of possession to enforce that order. The purchaser did not claim an order for possession in its Statement of Defence and Counterclaim and Crossclaim delivered in the underlying action.

45The purchaser argues that it is entitled to obtain leave to issue a writ of possession under rule 60.10 on motion in this proceeding by virtue of its status as the registered owner of the property and that only this appeal is standing in its way.

46The purchaser relies on a plain reading of the emphasized portions of rule 60.10(1) as set out below:

60.10(1) A writ of possession (Form 60C) may be issued only with leave of the court, obtained on motion without notice or at the time an order entitling a party to possession is made. [Emphasis added.]

47In my view, the purchaser’s submission is wrong in law. Rule 60.10 must be read in the context of the entire rule. Rule 60 is entitled “Enforcement of Orders”. The headings over the immediately following subsections reinforce that the subject matter of Rule 60 is the enforcement of orders. Rule 60.02 is entitled “Enforcement of Order for Payment or Recovery of Money”. Rule 60.03 is entitled “Enforcement of Order for Possession of Land”. Equally important, a plain reading of rule 60.03 makes it clear that the purpose of rule 60.10 is to enable the enforcement of an order for possession:

60.03 An order for the recovery or delivery of the possession of land may be enforced by a writ of possession (Form 60C) under rule 60.10.

48Reading Rule 60 as a whole, I consider that, like a writ of seizure and sale or a writ of sequestration, also provided for under Rule 60, a writ of possession is a tool to enforce a pre-existing court order [11]: see also Bank of Canada v. Ehtisham, 2010 ONSC 1528, at para. 9.

49At para. 31 of his affidavit sworn August 7, 2020, the purchaser’s solicitor, Mr. Dhillon, deposes that “[a]t all material times, 1103 Inc. knew that it was purchasing the Property under Power of Sale and without possession.” On the record before me, the purchaser assumed the risk of purchasing the property without insisting on vacant possession on closing and subsequently has taken no steps to put itself in a position to obtain timely court enforced possession of the property.

50In these circumstances, I fail to see why the purchaser’s circumstances should favour foreclosing the appellant’s right of appeal. The purchaser is not in a position to immediately obtain court enforced possession of the property if the appellant’s motion is dismissed. In any event, its carrying costs with respect to the property are currently being offset to some degree by the rental payments ordered by Woollcombe J. commencing September 2021 (in the amount of $4500 per month).

Criteria (vi) - The Justice of the Case

51In addition to their arguments about timeliness, the merits of the appeal and prejudice, the responding parties point to various other factors they say indicate the justice of the case favours dismissing the appellant’s motion.

52These factors include: i) an assertion that 1103 is a bona fide purchaser for value of the property; ii) the appellant’s default under the charge and continuing occupation of the property; and iii) unclean hands or misrepresented evidence concerning matters such as her relationship with Bobby Abrahams, whether she raised her children at the property, and lack of explanation as to why the money to close the February 28, 2020 agreement of purchase and sale was not paid into court until May 2020.

53As I have said, I am satisfied that the appellant has raised arguable grounds of appeal and I am not satisfied that the factors of timeliness or prejudice to the responding parties support foreclosing the appellant’s right of appeal.

54Concerning the additional matters raised by the responding parties, item i) depends on the outcome of the appeal.

55Concerning item ii), the issue now is not the appellant’s default under the charge. Rather, it is the propriety of the responding parties’ conduct in carrying out the sale under power of sale. That depends on the outcome of the appeal. Moreover, the issues on appeal are not restricted to the bona fides of the March 9, 2020 transfer but also include whether a proper price was obtained.

56Concerning item iii), no doubt there are issues around the complete terms of the Abrahams’ agreement of purchase and sale and why closing funds were not paid into court until May 2020. On the other hand, there is an issue about the inflated discharge statement delivered by Bindaas’ real estate lawyer on February 28, 2020 and the failure of any lawyer on behalf of Bindaas to respond to inquiries about the statement, attend the appellant’s motions relating to the discharge amount or disclose the pending sale to 1103.

57In all the circumstances, I am satisfied that the relief requested by the appellant should be granted but on terms concerning proceeding with the appeal.

Disposition

58Based on the foregoing reasons, the Registrar’s order dismissing the appellant’s appeal for delay shall be set aside provided that the appellant has taken all necessary steps to perfect the appeal, including filing any fresh evidence application but excluding filing the formal order under appeal and/or the transcript(s) of the motion hearing, within seven days of the release of these reasons subject to the following conditions:

i) the appellant shall proceed forthwith to settle and obtain the formal order under appeal and obtain the transcript(s) of the motion hearing and shall serve and file each in a supplementary appeal book(s) as soon as possible once obtained;

ii) the hearing of the appeal is expedited and a copy of this order shall be provided to the appeal scheduling unit so that the appeal may be scheduled as soon as it is perfected; and

iii) this order is without prejudice to the purchasers’ right to commence an action for possession of the property if so advised.

59The moving party may file submissions on costs within 10 days of receipt of these reasons, the responding parties may file their submissions within 10 days thereafter with all such submissions subject to a five-page limit.

“Janet Simmons J.A.”

Footnotes:

1The moving party also requested an order that the transcripts of the motion hearing be sent to the Registrar of this court. However, it is up to counsel, not the court, to arrange for and ensure the filing of any relevant transcripts. During the oral hearing, counsel submitted that the transcripts of the motion hearing have now been filed. However, the transcript(s) are not in the court file.

2Although Brinder Nagra was a named chargee pursuant to an assignment of charge at the time of the transfer under power of sale and was a named transferor in the transfer, the parties seem to be treating Bindaas as the chargee.

3The first charge was originally in favour of Bindaas, Sujoy Pal and Dr. Mangesh Inamdar Medicine Professional Corporation, but it was subsequently assigned to Bindaas and Sujoy Pal on February 12, 2019 and to Bindaas and Brinder Nagra on July 11, 2019.

4It appears that the appellant’s motion heard on June 9, 2021 may have been a cross-motion she brought in response to a motion by the purchaser and the purchaser’s principal (Shan Mangal) on November 24, 2020 requiring the appellant to pay expenses associated with her continued occupation of the property or, in the alternative, for a writ of possession: endorsement of Andre J. dated November 26, 2020; endorsement of Woollcombe J. dated August 18, 2021.

5Because the record before me does not include the exhibits to the responding parties’ affidavits filed before the motion judge, I am unable to verify that this chronology is completely accurate.

6The responding parties’ material is inconsistent concerning whether this action was to enforce the first charge or the second charge. At para. 28 of an affidavit sworn August 7, 2020, Mr. Dhillon, who acted for the purchaser, asserts it related to the first charge. At para. 19 of an affidavit sworn January 29, 2021, Mr. Randhawa, who acted for the chargee, asserts it relates to the second charge. As I have said, the affidavits included in record before me do not include exhibits. Because Mr. Randhawa asserts that the plaintiffs in the action were Bindaas, Pal and Inamdar Corp., the chargees in the first charge, I conclude it is more likely that this action related to the first charge. This is relevant because s. 42(1) of the Mortgages Act, R.S.O. 1990, c. M.40, prohibits action being taken to enforce a mortgage/charge during a notice period under a notice of sale. However, contravention of s. 42 likely only affects the validity of the action, not the notice of sale: Assari v. Kuchar, 2010 ONSC 4828, at para. 45. Here, the action on the first charge has been settled and judgment granted concerning the claim for payment on the covenant. To the extent that the action may have included a claim for possession, a fact which I am unable to determine based on the record before me, this issue may be relevant to the enforceability of that aspect of the claim.

7The title of proceedings refers only to the action on the first charge, but the body of the judgment refers to both actions.

8This comes from para. 22 of the motion judge’s reasons. However, no particulars of the date or parties involved are provided. From the context, however, it appears the discharge statement was likely requested on February 26 or 27, 2020.

9Although not referred to in Andre J.’s endorsement, a subsequent endorsement by Woollcombe J. indicates this relief was requested.

10In directing that the matter be heard on June 9, 2021 and that monies be paid into court, Andre J. referred to the appellant’s “counterclaim”. However, the context suggests that he was referring to the appellant’s cross-motion.

11Nothing in these reasons should be taken as challenging the validity of the orders of Andre J. or Woollcombe J. Unappealed, they stand as valid orders.