Royal Bank v Alburn Smith, 2023 ONSC 2665

Court File and Parties

COURT FILE NO.: CV-15-535511 RELEASED: 2023/05/01 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Royal Bank of Canada v. Alburn Smith

BEFORE: Associate Justice Graham HEARD: May 1, 2023

APPEARANCES: Gregory Bowden for the plaintiff gwb@lbnfirm.com No one else appearing

Endorsement - Reference Hearing

1The plaintiff’s action against Alburn Smith was for recovery of amounts owing on a loan and a credit card. The defendant did not defend the action and default judgment was rendered by the registrar on October 6, 2015 for $29,711.59 inclusive of costs. As of the Motion for Directions held before me on November 28, 2022, the entire judgment remained unpaid.

2On August 12, 2022, the plaintiff brought a motion for the judicial sale of the defendant’s property. On that date, Justice Vella ordered that there be a reference to an Associate Judge to inquire into and determine all issues relating to the conduct of the sale of the defendant’s property at 607 Maripose Lane, Mississauga, Ontario, L5B 3Y5, as a prerequisite to seeking an order for sale, including:

a) The nature and the particulars of the interest of the Defendant in the lands and of the Defendant’s title thereto;

b) The judgments and writs of execution that bind the lands as well as other secured and unsecured interests that form a lien or charge against the lands and the priorities between them;

c) The property or interest in the lands that is liable to be sold under the Judgment;

d) Any reason why it would be unjust or inequitable to require the sale of the Defendant’s property or interest in the lands; and

e) The manner in which the proceeds of a sale of the lands should be distributed.

3On November 28, 2022, after being assigned the reference, I conducted a Hearing for Directions under rule 55.02(1). I was satisfied that the defendant Mr. Smith had been properly informed of the Hearing but he did not communicate with plaintiff’s counsel and did not attend the Hearing. Plaintiff’s counsel provided a parcel register for the property showing that Alburn Smith and Esmeralda Cami, to whom the subject property of 607 Maripose Lane, Mississauga, Ontario was transferred on June 22, 2007, were still the registered owners of the property, and that the only Charge on the property was registered in favour of Computershare Trust Company of Canada, by way of a Transfer of Charge from First National Financial GP Corporation, on May 3, 2016.

4Plaintiff’s counsel also advised that there were three execution creditors who had filed writs of seizure and sale:

• The Family Responsibility Office, filed January 21, 2015;
• Preferred Credit Resources Limited, filed May 10, 2016;
• Contact Resource Services Inc., filed March 22, 2017.

5At the Hearing for Directions, I scheduled this Reference Hearing to proceed today, set a deadline of January 6, 2023 for the plaintiff to serve their Reference Record, and ordered requirements for service on the defendant Mr. Smith and the co-owner of the subject property Esmeralda Cami, the chargee Computershare Trust, and the execution creditors.

6For today’s hearing, plaintiff’s counsel filed affidavits of service as follows:

• The affidavit of service of Lauren Mantia sworn December 8, 2022 reflecting service of my November 28, 2022 Order, the Notice of Hearing for Directions, and Hearing for Directions Brief by regular mail sent to Mr. Smith, Ms. Cami, Computershare Trust, the Family Responsibility Office, Preferred Credit Resources Limited, and Contact Resources Services Inc. on December 8, 2022.
• The affidavit of service of process server John Lalewicz sworn December 22, 2022 reflecting service of the same documents as were served by regular mail on Alburn Smith by leaving copies with Esmeralda Cami at 607 Maripose Lane, Mississauga, Ontario on December 10, 2022, and by mailing copies of the same documents to Mr. Smith at that address. This is a valid alternative to personal service on Mr. Smith as required in paragraph 8.1) of my Order of November 28, 2022.
• An affidavit of service of John Lalewicz sworn December 22, 2022 reflecting personal service of the same documents as were served on Esmeralda Cami by regular mail by personal service on Ms. Cami at 607 Maripose Lane, Mississauga, Ontario on December 10, 2022.

7Based on these affidavits of service, I am satisfied that the defendant Mr. Smith, his spouse Ms. Cami, the chargee Computershare Trust, and the three execution creditors were all served with proper notice of this hearing as required in paragraph 8.1) of my November 28, 2022 order. Plaintiff’s counsel also provided confirmation at this hearing that Mr. Smith and Ms. Cami were provided with the Zoom coordinates for this virtual hearing by regular mail sent on April 20, 2023.

8I note that the plaintiff’s materials include a “Notice of Hearing for Directions”, despite the fact that the appearance on November 28, 2022 was the Hearing for Directions at which this Reference Hearing was scheduled, and today’s attendance was scheduled as the Reference Hearing. Plaintiff’s counsel informs the court that none of Mr. Smith, Ms. Cami, Computershare Trust or the execution creditors have contacted his firm subsequent to service as described above and none of these parties have served any responding materials.

9Accordingly, I conducted today’s hearing as the Reference Hearing with none of the defendant, Ms. Cami, Computershare Trust or the execution creditors in attendance, although properly served.

10The affidavit of Lauren Mantia, an “employee” of the plaintiff’s solicitors, served and filed for this hearing, contains the following evidence:

• The statement of claim issued September 1, 2015 claiming recovery of a total of $27,964.38.
• The signed, issued and entered judgment dated October 6, 2015 against the defendant Alburn Smith for a total of $28,451.88 plus costs of $1,259.71, plus post-judgment interest. The preamble to the judgment reflects the filing of proof of service of the statement of claim on the defendant and that the defendant was noted in default.
• The filing of the writ of seizure and sale on October 13, 2015 and the renewal of the writ on March 2, 2020.
• The endorsement of Vella J. dated August 12, 2022. This endorsement was made on the plaintiff’s motion for a reference for the judicial sale of the defendant’s home at which he resides in joint tenancy with Esmeralda Cami; Mr. Smith did not appear on the motion. Vella J. reviews the judgment of October 6, 2015 and the renewal of the writ of seizure and sale on March 2, 2020, and notes that Mr. Smith had paid nothing with respect to the debt. Vella J. was satisfied that the proposed reference for a judicial sale was “the most expeditious and least expensive way to optimize the best sale price for the subject property, should it ultimately come to pass.” Vella J. granted the order sought for a reference to inquire into and determine the issues particularized in her signed order, “as a prerequisite to seeking an order for sale, pursuant to r. 54.02(2)(b).” Accordingly, the sale has not yet been ordered.
• The parcel register reflecting the transfer of 607 Maripose Lane, Mississauga to Mr. Smith and Ms. Cami on June 22, 2007 for $360,000.00, the Charge in favour of First National Financial Corporation on June 22, 2007 for $336,000.00, which confirms that Mr. Smith and Ms. Cami are spouses of one another, and the Transfer of Charge in favour of Computershare Trust Company of Canada on May 1, 2016. As of November 28, 2022, the last transaction on the parcel register was the Transfer of Charge to Computershare Trust on May 1, 2016, and counsel advises that this was still the case as of April 19, 2023. The registered Charge and Transfer of Charge documents are exhibits to the affidavit.
• The three writs of execution referred to at the Hearing for Directions, as follows:
  1. In favour of Director, Family Responsibility Office for $6,384.00 plus interest dated January 21, 2015;
  2. In favour of Preferred Credit Resources Limited for $10,132.86 plus $285.00 for costs, plus interest, issued on May 10, 2016;
  3. In favour of Contact Resources Services Inc. for $3,576.80 plus $505 for costs, issued on March 22, 2017.

Findings on the Reference Hearing

11Based on the evidence in the affidavit of Lauren Mantia, my findings with respect to the stipulated issues in paragraph 1 of Vella J.’s order of August 12, 2022 are:

a) The nature and the particulars of the interest of the Defendant in the lands [i.e. 607 Maripose Lane, Mississauga, Ontario] and of the Defendant’s title thereto:

The defendant Alburn Smith is a registered owner of 607 Maripose Lane, Mississauga, Ontario as a joint tenant with his spouse Esmeralda Cami, subject to the charge registered on title in favour of Computershare Trust.

b) The judgments and writs of execution that bind the lands as well as other secured and unsecured interests that form a lien or charge against the lands and the priorities between them:

The plaintiff acknowledges that the mortgage of June 22, 2007 to National Financial Corporation, which was transferred to Computershare Trust, would have priority over all other creditors. The plaintiff and the other three execution creditors would be entitled to share the balance of the proceeds of any sale on a pro rata basis. See: Creditors Relief Act, S. O. 2018, c. 16, Sched. 4, s. 4(7):

4(7) In distributing money under this section, creditors who have executions against personal property only, against real property only or against personal property and real property, are entitled to share rateably with all other execution creditors any money realized under any execution or attaching order.

c) The property or interest in the lands that is liable to be sold under the Judgment:

As the defendant has provided no evidence to the contrary, the only evidence on this issue is as in the parcel register summarized above, which is that the defendant Alburn Smith and his spouse Esmeralda Cami are the joint owners of the subject lands at 607 Maripose Lane, Mississauga.

d) Any reason why it would be unjust or inequitable to require the sale of the Defendant’s property or interest in the lands:

Although Mr. Smith’s spouse Esmeralda Cami has a 50% spousal interest in the lands, neither of the joint owners has made any submission that would suggest any hardship that would render the sale of the lands unjust.

e) The manner in which the proceeds of a sale should be distributed:

Based on the finding with respect to the priorities of the various interests in the lands at b) above, the net proceeds of any sale, taking into account expenses relating to the sale, should be distributed first to the chargee Computershare Trust to pay any balance owing under the charge, then pro rata among the plaintiff and the other three execution creditors, with any balance then provided to the defendant Mr. Smith and his spouse Ms. Cami.

12Plaintiff’s counsel submits that based on Rule 54.03, I, as the referee to whom the reference was assigned, have authority to order the judicial sale of the subject property. However, as highlighted above, Vella J. has ordered that there be a reference to inquire into and determine all issues relating to the conduct of the sale “as a prerequisite to seeking an order for sale”; Vella J. then identified the specific issues to be addressed.

13The motion for a judicial sale of 607 Maripose Lane, Mississauga, was before Vella J. on August 12, 2022, and neither Vella J.’s order nor Rule 54.03 delegate to me the jurisdiction to order that sale. Accordingly, plaintiff’s counsel shall submit my report to Vella J. for her review and such further order as she may consider appropriate and just.

14Pursuant to rule 55.02(20), the plaintiff, having carriage of the reference, shall prepare a draft report based on my findings in this endorsement. As neither the defendant nor anyone else who was served with notice of the Reference Hearing appeared at the hearing, I hereby dispense with the requirement to give notice of the appointment to settle the Report. Plaintiff’s counsel shall submit a Word copy of the report to me through my ATC Teanna Charlebois (Teanna.charlebois@ontario.ca). If I determine that there are no issues as to the content of the report, I will sign it and release it; if there are, I will convene a case conference with counsel on a mutually convenient date.

15With respect to steps to be taken following the signing of the Report, the plaintiff is reminded of the provisions of Rules 54.07 and 54.08(1):

54.07(1) A report has no effect until it has been confirmed. (2) A report shall be entered immediately after it has been confirmed and rule 59.05 (entry of order) applies, with necessary modifications.

54.08(1) Where the order directing the reference requires the referee to report back, the report or an interim report on the reference may be confirmed only on a motion to the judge who directed the reference on notice to every party who appeared on the reference, and the judge may require the referee to give reasons for his or her findings and conclusions and may confirm the report in whole or in part or make such other order as is just. [emphasis added]