Citation and Parties
DIVISIONAL COURT FILE NO.: DC-15-559
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Jennifer Pinks, Plaintiff/Respondent in appeal
AND: Jagdish Bhatia, Norman Silver, VKT Financial Concept Inc., Tom Thiru, Defendants/Appellant Norman Silver
BEFORE: Kiteley J.
COUNSEL: M. Deverett, for the Plaintiff/Respondent in appeal D. Fenig, for the Defendant Silver/Appellant
HEARD at Toronto: March 1, 2017
ENDORSEMENT
1This is an appeal pursuant to s. 31 of the Courts of Justice Act1 by Norman Silver from the judgment of Deputy Judge De Lucia dated October 2, 2015. For the reasons that follow, the appeal is granted and the judgment against Silver is set aside.
Background
2The plaintiff mortgaged her property to Bhatia in the principal amount of $49,000 due in two years on February 1, 2009. After maturity, the plaintiff continued to make payments. In May 2010, Bhatia served the plaintiff with a Notice of Sale under Mortgage and on July 26, 2010, Bhatia issued a statement of claim. On August 6, 2010 the plaintiff paid, under protest, the full amount demanded, namely $56,449.80. Mark Wainberg acted as the plaintiff’s lawyer in the negotiations.
3On February 23, 2012, the plaintiff issued the statement of claim in the Small Claims Court prepared by Mr. Wainberg. Bhatia was named as mortgagee; Silver was named as Bhatia’s lawyer; Thiru was named as Bhatia’s “duly authorized agent”; and VKT Financial Concept Inc. was named as Thiru’s corporation.
4In paragraph 1, the plaintiff claimed against all defendants jointly and severally as follows:
(a) damages in the amount of $16,000 including the overpayment of $11,506.07 and her legal costs;
(b) pre-judgment interest at the mortgage rate of 12.5% per year, or alternatively, the rate prescribed by the Courts of Justice Act;
(c) punitive damages in the amount of $9000;
(d) post-judgment interest and costs.
5The plaintiff claimed that Bhatia had no legal right to institute enforcement proceedings and that the amounts in the mortgage statement provided in February 2010 were “grossly inflated and patently inaccurate” with respect to a renewal fee, NSF fees, and missed payments. The plaintiff claimed that Bhatia’s Notice of Sale dated May 19, 2010 was “wholly invalid” and contained improper claims for “mist payment”, non-payment administration fee, drive-by appraisal costs, outstanding renewal fee, legal/paralegal fees, statement fees and interest at 19.75%.
6The allegations involving Silver were these:
Because of the excessive amounts being claimed by Bhatia, the plaintiff had difficulty arranging alternate financing. Pending the completion of the refinancing, Bhatia and his lawyers demanded that the plaintiff pay additional legal fees and disbursements claimed by the Bhatia’s lawyer Norman Silver (“Silver”) as a precondition of the discharge of Bhatia’s mortgage. The amounts claimed for additional legal costs were excessive, and pursuant to s. 22 of the Mortgages Act, Bhatia was not entitled to be reimbursed for any such costs (because of Bhatia’s continuing default in providing a proper mortgage statement).
Silver provided a further purported mortgage statement by letter dated July 26, 2010 addressed to “Meridian Hydro Place Branch”. The plaintiff’s lawyer Mark Wainberg responded to that letter by letter dated July 29, 2010, in which Mr. Wainberg raised the following objections . . .
Thiru instructed Silver to ignore all of the objections raised in Mr. Wainberg’s letter dated July 29, 2010.
As a result of the improper acts and omissions of the defendants described above, the plaintiff incurred legal costs in excess of $3,000 which she would not otherwise have had to incur.
All of the defendants unconscionably exploited the plaintiff’s financial vulnerability and should be deterred from treating other homeowners in a similar manner. The plaintiff therefore claims punitive damages against all of the defendants.
7Bhatia and VKT were noted in default and did not appear at the trial.
8In his statement of defence, Silver made a general denial, affirmed that he acted on behalf of Bhatia from whom