Court File and Parties
Court File No.: CV-23-00000193 Date: 2024-05-21 Superior Court of Justice – Ontario
Re: Michael Levinson, Plaintiff And: Janina Joseph-Walker, also known as Janina June Joseph-Walker, Sharon Taylor, Ryan Minton, and 2380376 Ontario Limited, Defendants
Before: Charney J.
Counsel: David A. Stone, for the Plaintiff Janina Joseph-Walker, Self-Represented
Heard: May 14, 2024
Reasons for Decision
[1] The Plaintiff, Michael Levinson, brings this motion for summary judgment in relation to a second mortgage between the Defendant, Janina Joseph-Walker as mortgagor and the Plaintiff.
Facts
[2] The Mortgage is registered on the property municipally known as 12 Night Sky Court, Richmond Hill, Ontario (the “Property”).
[3] The Plaintiff holds a second mortgage on the Property, which is owned by Ms. Joseph-Walker.
[4] This Mortgage was arranged on the Plaintiff’s behalf by his then mortgage administrator, the Defendant 2380376 Ontario Limited.
[5] The Plaintiff, and the Defendants 2380376 Ontario Limited, Sharon Taylor and Ryan Minton were all mortgagees with separate interests in the Mortgage. The Plaintiff held a 52.63% interest in the Mortgage. 2380376 Ontario Limited participated as a 13.16% interest holder, Sharon Taylor held a 26.32% interest, and Ryan Minton held a 7.89% interest in the Mortgage. The Charge was for $380,000, and was registered on the Property on August 17, 2021 for a one year term at 11.99% interest.
[6] The Plaintiff is not seeking any relief against the other mortgagees. They were named as defendants because they have an interest in the proceeding but did not participate as plaintiffs: Boltyansky v. Joseph-Walker, 2024 ONSC 192, at para. 85, citing Rayner and McLaren, Falconbridge on Mortgages, 4th ed (1977) at p. 458, for the proposition that:
If there are two or more mortgagees, they must both or all be parties to the action, whether they be joint tenants or tenants in common of the land conveyed by the mortgage and one of the mortgagees may bring a foreclosure action and make his co-mortgagees defendants if they will not join as plaintiffs.
[7] These defendants did not serve a Statement of Defence, and were noted in default in May 2023.
[8] The Mortgage requires Ms. Joseph-Walker to make monthly payments of $3,796.83 as one of her obligations under the Mortgage. Ms. Joseph-Walker has not made a single payment under the Mortgage since May 1, 2022. The Mortgage matured on August 1, 2022, and has not been renewed.
[9] Paragraph 10 of the Standard Charge Terms states:
Upon default in payment of principal and interest under the Charge or in performance of any of the terms or conditions hereof, the Chargee may enter into and take possession of the land hereby charged and where the Chargee so enters on and takes possession or enters on and takes possession of the land on default as described in paragraph 9 herein the Chargee shall enter into, have, hold, use occupy, possess and enjoy the land without the let, suit, hindrance, interruption or denial of the Chargor or any other person or persons whomsoever
[10] Ms. Joseph-Walker is thereby in breach of the Mortgage, and the Plaintiff is entitled to enforce the terms of the Mortgage, which includes taking possession of the Property.
[11] The Plaintiff issued his Statement of Claim on February 8, 2023.
[12] In her Statement of Defence, dated March 15, 2023, the Defendant does not dispute the facts alleged in the Statement of Claim. She pleads that she is in the midst of ongoing “fraud litigation” against the Defendant 2380376 Ontario Limited and its principal, Steve Hazan. She alleges that she was the victim of a fraudulent mortgage transaction in which she suffered damages that “are not fully quantified”. She alleges that the parties who defrauded her registered a Court Order on the Property and, as a result, she has been unable to refinance the property or “obtain new financing to pay any existing lenders”.
[13] The Defendant pleads that, if she had been able to obtain financing to pay existing lenders, “one of the existing lenders that JJW [the Defendant] would have paid out was the plaintiff”, Michael Levinson.
[14] Michael Levinson is not a party to the fraud litigation and no allegations of fraud have been made against him.
[15] Finally, the Defendant pleads that this action should be stayed “pending a full determination” of her fraud litigation against 2380376 Ontario Limited.
[16] Ms. Joseph-Walker is also in default of the first mortgage of more than $2,300,000 held by AST Trust Company, which has served her with a Notice of Sale.
[17] The Property has also accumulated significant property tax arrears of $25,859 as of April 28, 2023.
Defendant’s “Fraud Litigation”
[18] The Defendant’s Statement of Defence refers to her ongoing “fraud litigation” against the Defendant 2380376 Ontario Limited and its principal, Steve Hazan. The Statement of Defence states that the litigation is at the “pleadings stage”.
[19] The Statement of Defence does not indicate either the name or court file number of the fraud litigation.
[20] During the summary judgment motion, I asked the Defendant for the name and court file number of the “fraud litigation” referenced in the Statement of Defence. She advised that she had commenced the claim under the name of her corporation “Avenue Development Inc.” and that Steve Hazan and his corporation 2380376 Ontario Limited were the defendants. She advised that the court file number was CV-23-00709952-00.
[21] Following the hearing, I reviewed Court file # CV-23-00709952-00. The style of cause of that proceeding is: 2380376 ONTARIO LIMITED o/a AMBASSADOR MORTGAGE SOLUTIONS v. ISHAN DHANAPALA, LIDIA KAFIEH and MICHELLE D’ERCOLE. The Statement of Claim was filed on November 20, 2023. Ms. Joseph-Walker is not a party to that proceeding, and the Plaintiff is 2380376 Ontario Limited, the party she alleges she has sued in her fraud action. Ms. Joseph-Walker must have been mistaken when she identified this court file number as her fraud action.
[22] Ms. Joseph-Walker is the Plaintiff in another action: Janina Joseph-Walker, Avenue Developments Inc. and Alpha Financing Inc. v. Cindy Smith et al., Court File # CV-22-683420. A total of 22 defendants are named in that action, including Steve Hazan and 2380376 Ontario Ltd.
[23] That action, which was originally commenced as an application, was consolidated with two other actions on January 12, 2023. The history of that consolidation is outlined by Kimmel J. in her decision in Boltyansky v. Joseph-Walker, 2024 ONSC 192, at paras. 1-3. It is apparent that # CV-22-683420 must be the “fraud action” that Ms. Joseph-Walker refers to in her Statement of Defence in this case.
[24] For the purposes of this proceeding, it is important to note that the fraud action Joseph-Walker v. Smith (# CV-22-683420) was consolidated with the mortgage action, Boltyansky v. Joseph-Walker (# CV-22-683452).
[25] I will return to the decision in Boltyansky in my analysis because that case is strikingly similar to this case.
Adjournment Request
[26] This motion for summary judgment was originally scheduled to be heard on November 14, 2023, but was adjourned by Speyer J. because it should have been scheduled as a long motion. In her Endorsement, Speyer J. ordered that a long motion date be scheduled through the Trial Coordinator, and ordered the Defendant, Janina Joseph-Walker, to file her responding motion record and factum, and to complete cross-examinations on affidavits by December 18, 2023.
[27] The motion for summary judgment was placed on the Central East long motion running list, and a date became available on May 14, 2024.
[28] The Defendant did not comply with this timetable. Indeed, no cross-examinations were conducted, and the Defendant has not filed a responding motion record or a factum.
[29] The Defendant explained that her previous lawyer, Paul Robson, was suspended by the Law Society of Ontario on December 18, 2023 – the same date that her responding material was due (the date appears to be an unfortunate coincidence). She did not find out about his suspension until January 2024, and she has been unable to retrieve her file from Mr. Robson or retain a new lawyer. She requested a two week adjournment so she could retain a lawyer or complete the refinancing of the Property.
[30] Unfortunately, there were no long motion dates available in June, 2024, and the only available option would be to place this motion on stand-by in the event that a long motion date arose due to a cancellation of some other matter.
[31] Given the history of this matter, and the merits of the case, I was not prepared to adjourn the motion for summary judgment for an indefinite period, since that would be procedurally and substantively unfair to the Plaintiff, particularly when there is no dispute that the Defendant is in default of the Mortgage and the mortgage term expired nearly two years ago. There is a real risk that any further delays will prejudice the Plaintiff’s ability to recover his Mortgage principal and interest.
[32] A review of the correspondence between Mr. Stone, counsel for the Plaintiff, and Ms. Joseph-Walker demonstrates that counsel for the Plaintiff encouraged Ms. Joseph-Walker to retain a new lawyer and serve her responding material, even though the December 18, 2023 deadline imposed by the Court had passed.
[33] On January 24, 2024, Mr. Stone emailed Ms. Joseph-Walker and explained that he had been informed that her previous counsel was no longer practicing. He asked whether she had retained a new lawyer and asked that her new lawyer contact him.
[34] Ms. Joseph-Walker responded the same day, stating that she was in the process of retaining a new lawyer “and attempting to complete my refinancing by next week”.
[35] On February 5, 2024, Mr. Stone had not heard from Ms. Joseph-Walker and emailed her again, asking for her lawyer’s contact information and, given her statement that she was attempting to refinance, to forward a copy of the lender’s signed commitment to the refinancing. He also asked that the responding materials that were ordered by the Court to be delivered by December 18, 2023 be delivered by February 9, 2024.
[36] Ms. Joseph-Walker responded the same day, stating that she could not deliver the responding material until February 16, 2024, and that she was finalizing retaining a lawyer.
[37] Mr. Stone wrote again on February 27, 2024, noting that Ms. Joseph-Walker’s own deadline of February 16, 2024 had passed, and she still had not hired a lawyer or provided any responding material.
[38] Ms. Joseph-Walker responded on March 1, 2024, stating that she was seeking a lawyer “and once I have a lawyer retained he or she will contact you directly”.
[39] On March 11, 2024, Mr. Stone advised Ms. Joseph-Walker that he intended to move the matter forward since his client had not received any payment since May 2022, almost two years. He asked Ms. Joseph-Walker if she was available for a motion on April 23, 30 or May 14, 2024, which would still give her sufficient time to retain a lawyer and put materials before the Court.
[40] Ms. Joseph-Walker responded, and asked Mr. Stone to book the motion for May 14, 2024.
[41] Ms. Joseph-Walker has had nearly 5 additional months since the December 18, 2023 deadline to prepare responding material and retain a lawyer or arrange for refinancing.
Motions for Summary Judgment
[42] Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides: “The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.”
[43] Rule 20.04(2.1) sets out the court’s powers on a motion for summary judgment:
In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence.
[44] These powers were extensively reviewed by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, where it laid out a two-part roadmap for summary judgment motions at para. 66:
On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[45] Even with these extended powers, a motion for summary judgment is appropriate only if the material provided on the motion “gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute” (Hryniak, at para. 50).
[46] In Hryniak, the Supreme Court held (at para. 49) that there will be no genuine issue for trial when the summary judgment process “(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.”
[47] To defeat a motion for summary judgment, the responding party must put forward some evidence to show that there is a genuine issue requiring a trial. A responding party may not rest on mere allegations or denials of the party’s pleadings, but must set out—in affidavit material or other evidence—specific facts establishing a genuine issue requiring a trial.
[48] The motion judge is entitled to assume that the record contains all of the evidence that would be introduced by both parties at trial. A summary judgment motion cannot be defeated by vague references as to what may be adduced if the matter is allowed to proceed to trial.
[49] It is well settled that “both parties on a summary judgment motion have an obligation to put their best foot forward” (see Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753, at para. 9). Given the onus placed on the moving party to provide supporting affidavit or other evidence under Rule 20.01, “it is not just the responding party who has an obligation to ‘lead trump or risk losing’” (see Ipex Inc. v. Lubrizol Advanced Materials Canada, 2015 ONSC 6580, at para. 28).
[50] Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment.
[51] While Rule 20.04 provides the court hearing a summary judgment motion with “enhanced forensic tools” to deal with conflicting evidence on factual matters, the court should employ these tools and decide a motion for summary judgment only where it leads to “a fair process and just adjudication”: Mason v. Perras Mongenais, 2018 ONCA 978, at para. 44; Eastwood Square Kitchener Inc. v. Value Village Stores, Inc., 2017 ONSC 832, at paras. 3-6 (and cases cited therein).
[52] In the present case, the Defendant has not filed any material to support her position.
[53] I am satisfied that, given the motion record filed by the Plaintiff and the lack of responding material from the Defendant, there is no genuine issue of material fact requiring a trial, and this is an appropriate case to proceed by summary judgment.
[54] Indeed, even if I accepted as true the allegations in the Defendant’s Statement of Defence, this would still be an appropriate case for summary judgment. As indicated, the Defendant does not dispute that she borrowed the money from the Plaintiff and that she is in default of the Mortgage. Her defence is to ask the Court to stay this action while she pursues an unrelated claim against another party. The Plaintiff in this case is not a party to the Defendant’s fraud litigation, and there is no reason to justify a stay of this action while the Defendant pursues her fraud claim against 2380376 Ontario Limited and Steve Hazan.
Analysis
[55] Boltyansky, like the case before me, was a motion for summary judgment brought by mortgagees who were lenders under a syndicated loan advanced to Ms. Joseph-Walker. Like the present case, not all of the lenders joined the action. The loan was secured by a mortgage. The mortgage went into default.
[56] The Mortgagee Plaintiffs sought summary judgment against Ms. Joseph-Walker for the amounts they claim was owing to them in respect of each of their respective proportionate shares of the total Loan. They sought to enforce their rights under the Mortgage against the Mortgaged Properties in respect of the amounts they claimed to be owed.
[57] In response to the mortgagee’s motion for summary judgment, Ms. Joseph-Walker asserted her fraud action against the 22 Defendants in the consolidated claim # CV-22-683420.
[58] Kimmel J. held that the Joseph-Walker fraud action could not be used to hold up the mortgagee’s claim for summary judgment. She stated, at paras. 15 and 16:
The issues have evolved and the process to get to an adjudication of the Summary Judgment Motion has been frustrating for the parties at times. A lot of time and effort has been devoted by the parties to bring the issues before the court. Many accommodations were afforded by the court to the Joseph-Walker Parties because they were self-represented.
Despite the multitude of sequential and creative arguments raised by the Joseph-Walker Parties in an effort to avoid summary judgment being granted against them in the Mortgage Action, ultimately they cannot delay any longer the basic and irrefutable fact that they were loaned money by the Mortgagee Plaintiffs, they signed the Commitment Letters, they granted the Mortgage, they defaulted on the Loan and there is no evidentiary foundation for the suggestion that the Mortgagee Plaintiffs were involved in or benefited from the alleged fraud. The Mortgagee Plaintiffs are seeking to enforce irrefutable contractual rights.
[59] With the exception of the description of the property and specific dates, the summary of the facts in Boltyansky, at para. 25, is an apt summary of the facts of the case before me:
The Joseph-Walker Parties do not dispute that they received funds from the Mortgagee Plaintiffs, that the Mortgage was registered on title to the Bathurst Properties to secure the Loan advances, that the Mortgage went into default in October 2021 and that it has not been put back into good standing for more than two (2) years. The Joseph-Walker Parties have not attempted to negotiate a payment plan or sell the Mortgaged Properties, and have not demonstrated any plan nor intent to pay back the Loan pending the determination of their Fraud Action.
[60] Kimmel J. reviewed the Joseph-Walker fraud action in some detail (at paras. 26 – 41).
[61] Kimmel J. denied Joseph-Walker’s request to adjourn the summary judgment motion because, at para. 84, an adjournment “would be procedurally and substantively unfair to the Mortgagee Plaintiffs given how long they have waited to have their summary judgment motion heard, and given all of the accommodations that the court had already afforded to the Joseph-Walker Parties”. As indicated above, I have arrived at the same conclusion in the motion before me.
[62] With respect to the merits of the summary judgment motion, Kimmel J. concluded, at para. 100:
There is no genuine issue for trial with respect to the entitlement of each of the Mortgagee Plaintiffs to be repaid their proportionate fractional share of the Loan advanced and that they are contractually entitled to be repaid under their respective Lender Commitments, together with contractual interest. There is no genuine issue for trial in respect of the claims by the Mortgagee Plaintiffs in the Mortgage Action.
[63] I arrive at the same conclusion in the motion before me. The Plaintiff has established that he advanced the Loan to Ms. Joseph-Walker, and that he has not been paid anything under the Mortgage since May 1, 2022. The Defendant is clearly in default of the Loan and Mortgage. The amounts claimed are in accordance with the terms of the loan agreement signed by Ms. Joseph-Walker. The Plaintiff in this case is not a party to the fraud action. Ms. Joseph-Walker has filed nothing in response to the motion for summary judgment. There is nothing in her Statement of Defence which, if true, would deny the Plaintiff the remedy he seeks. Indeed, the Statement of Defence acknowledges that the debt is owing to the Plaintiff and that the Defendant is not able to “obtain new financing to pay any existing lenders”.
[64] I agree with, and adopt, the conclusion in Boltyansky, at paras. 109 and 114:
The unsupported allegations of fraud should not prevent the Mortgagee Plaintiffs from collecting on what they are owed or require them to remain in an action against other parties alleged to have committed a fraud on the Joseph-Walker Parties, at continued expense and inconvenience.
In the circumstances where the Joseph-Walker Parties have continuing claims against some of those other Mortgagees (which they do, including Mr. Hazan and some of his relatives), steps can be taken to ensure that those other Mortgagees' share of any sale proceeds are held in trust pending the outcome of the claims by the Joseph-Walker Parties against them. However, the claims and enforcement remedies of the uninvolved Mortgagee Plaintiffs should not be held up over this.
[65] I conclude, therefore, that this is an appropriate case for summary judgment. There are no facts in dispute that are relevant to the merits of the Plaintiff’s claim.
[66] I am also satisfied that the Plaintiff meets the requirements of Rule 60.10 of the Rules of Civil Procedure, and is entitled to a writ of possession for the Property. The Standard Charge Terms, Section 10, provide that the Plaintiff is entitled to a quiet possession of the Property upon default. The Mortgage is in default. The Defendant is the sole owner of the Property and the only mortgagor under the Mortgage.
[67] Notice of this proceeding was duly given. All persons in actual possession of any part of the land have received sufficient notice of this proceeding to have enabled them to apply to the Court for relief. All of the other mortgage holders were given notice of this proceeding. Therefore, the Plaintiff has complied with Rule 60.10 and leave to issue a writ of possession is granted.
Conclusion
[68] This Court Orders that:
a. The Plaintiff’s motion for summary judgment is granted;
b. The Plaintiff is granted possession of the mortgaged Property;
c. The Plaintiff is granted leave to issue a Writ of Possession in respect of the mortgaged Property;
d. If the property is sold, the proceeds of sale are to be distributed in accordance with s. 27 of the Mortgages Act, R.S.O. 1990, c. M.40, save and except any share from the sale otherwise owing to Steve Hazan or 2380376 Ontario Limited, which shall be paid into court to the credit of this action, pending the outcome of the claims by Ms. Joseph-Walker against them, or further order of this Court;
e. The Defendant, Janina Joseph-Walker, shall pay to the Plaintiff the costs of this action and this motion including HST and disbursements in the amount of $7,000; and
f. This Order bears interest at the rate of 11.99% per year, beginning on the date of entry hereof.
Justice R.E. Charney Released: May 21, 2024