Court of Appeal for Ontario

Date: 2017-04-18 Docket: C62223 Judges: Feldman, Cronk and Miller JJ.A.

Parties

Between

Stanbarr Services Limited, Kempston Grove Corp., 617695 Ontario Limited & Eddy Goldberg Plaintiffs (Respondents)

and

Hans Jorg Reichert & Marianne Reichert Defendants (Appellant)

Counsel

For the Appellant: Ivan Y. Lavrence

For the Respondents: Martin Greenglass

Heard: April 12, 2017

On appeal from: The judgment of Justice Francine Van Melle of the Superior Court of Justice, dated May 12, 2016.

By the Court

Introduction

[1] The appellant, Hans Jorg Reichert, appeals from the judgment of Van Melle J. of the Superior Court of Justice dated May 12, 2016 ordering him to pay the respondent mortgagees the sum of $1,293,734.54 owing on a private, residential mortgage in the amount of $765,000 granted by the appellant to the respondents in February 2011 on his matrimonial home, together with costs in the amount of $26,000, plus pre-judgment interest.

[2] The appellant raises two grounds of appeal. He argues that the trial judge erred: i) by failing to grant an adjournment of the trial on May 12, 2016, requested on that date by the appellant's wife, Marianne Reichert; and ii) by proceeding to conduct the trial and grant judgment in favour of the respondents on May 12, 2016 in the appellant's absence, and without continuing the trial to permit him an opportunity to attend and lead evidence in defence of the respondents' action for payment of the mortgage debt.

[3] The appellant also seeks leave to introduce fresh evidence on this appeal, consisting of documentation that he says demonstrates that he had relevant evidence to lead at trial in his defence of the mortgage action that was capable of yielding a different outcome.

[4] For the reasons that follow, we conclude that the appeal must be dismissed.

Background in Brief

[5] Default in payment on the second mortgage held by the respondents occurred in November 2011. On April 18, 2013, the respondents obtained partial summary judgment for possession of the mortgaged premises. In granting summary judgment, Bielby J. of the Superior Court of Justice rejected the appellant's claim that he and his wife were merely tenants of the property and that the property was legally and beneficially owned by a family trust created by the appellant and his wife, rather than the appellant personally. This court dismissed the appellant's appeal from Bielby J.'s judgment on October 2, 2013: Reichert v. Stanbarr Services Limited, 2013 ONCA 602.

[6] Thereafter, a court-appointed receiver sold the mortgaged premises, with court approval. The sale proceeds were insufficient to satisfy either the debt owing on a first mortgage on the property or any of the monies owing under the second mortgage held by the respondents.

[7] The respondents' action for payment of the mortgage debt was set down for trial in Brampton in December 2014, for an estimated six to ten days. A pre-trial was conducted in June 2015 and the action was scheduled for trial during the week of February 22, 2016. The appellant, who was then self-represented, was cautioned by the court to retain counsel if he wished to do so.

[8] When a second pre-trial was held on February 22, 2016, the appellant sought and was granted an adjournment to afford him further time to retain counsel. The case was marked peremptory to the appellant for trial in May 2016.

[9] On April 27, 2016, the appellant sued his former solicitor, who had furnished him with independent legal advice on the mortgage transaction with the respondents. The appellant also moved for an order that the negligence action and the respondents' mortgage action, together with certain other litigation, be consolidated or tried together and transferred to Toronto. The motion did not proceed because the requisite confirmation notice had not been filed with the court.

[10] By this time, the appellant had retained counsel. A third pre-trial of the mortgage action was held in early May 2016. On the day of the pre-trial, counsel informed the court that his retainer had been terminated. The appellant again sought an adjournment of the trial. His request was denied by the pre-trial judge.

[11] On May 12, 2016, the respondents attended court with counsel and their witnesses for commencement of the trial. Without prior notice to the respondents, neither the appellant nor any counsel on his behalf attended court. Instead, the appellant's wife appeared and again requested an adjournment of the trial, relying particularly on a doctor's letter dated May 10, 2016, which stated that the appellant had suffered an emotional breakdown after the third pre-trial and that he would be unable "to attend any court hearings and trials for at least a couple of months". It also emerged that the appellant had failed to pay several outstanding costs orders and, according to his wife, had no funds to pay them or any costs that might be awarded to the respondents as a term of the requested adjournment, if granted.

[12] After hearing submissions, the trial judge declined to grant the adjournment and proceeded with the trial in the appellant's absence. It is this discretionary decision that the appellant now attacks before this court.

Discussion

[13] In our view, the trial judge was fully justified in refusing to grant the appellant a further adjournment of the trial. By May 12, 2016, the action had been set down for trial for almost 17 months, three pre-trials had been conducted, the appellant had been warned of the need to retain counsel on a timely basis should he wish to do so, the trial had already once been adjourned at the appellant's request and a new trial date – peremptory to the appellant – had been set, the appellant had retained, and terminated, the services of a solicitor, and the respondents and their counsel had prepared for trial and were ready, willing and able to proceed, together with their witnesses.

[14] Further, the medical evidence proffered by the appellant's wife indicated that the appellant would be unable to proceed with the trial for "months", the appellant professed to have no funds to pay the respondents' costs thrown away should an adjournment be granted, and several previous costs orders against the appellant, some in respect of the same litigation, remained unpaid.

[15] In all these circumstances, the granting of a further adjournment would have been manifestly unfair to the respondents and contrary to the interests of justice and judicial economy. It was open to the trial judge to deny an adjournment, in the exercise of her discretion. This was her call to make and we see no basis for appellate interference with her ruling.

[16] Nor do we accept the appellant's assertion that the trial unfairly proceeded in his absence.

[17] Contrary to the appellant's submission, it appears that the trial judge made no direction that, at the conclusion of the respondents' evidence, the trial would be adjourned until May 16, 2016 for the purpose of allowing the appellant to attend trial and call evidence. Instead, the trial judge offered to adjourn the trial for a few days and also invited the appellant's wife to remain and participate in the trial on behalf of the appellant.

[18] However, the appellant's wife refused either accommodation. As Roberts J.A. of this court noted at para. 21 of her reasons on a motion for security for costs in this matter, dated October 18, 2016:

Moreover, the trial judge's exchanges with Ms. Reichert demonstrate that the offer of a few days' adjournment was conditional on Ms. Reichert's confirmation that the appellant would appear in a few days' time. When Ms. Reichert declined to remain without agreeing to the offer of a few days' adjournment, the trial judge stated clearly that the trial would proceed in the appellant's absence.

[19] In any event, based on the doctor's May 10 letter provided to the trial judge by the appellant's wife, no reasonable expectation could have arisen that the appellant would be available for trial by May 16. Nor did the appellant's wife suggest to the contrary or that counsel for the appellant would be able to attend court on May 16 or that she would herself be prepared to act as the appellant's agent for the conduct of his defence. Instead, in effect, an adjournment of an unspecified, but lengthy, duration was sought.

[20] Moreover, and importantly, the record does not support the appellant's claim that he was denied procedural fairness because the trial judge denied his adjournment request without fully hearing from the parties. The trial judge heard submissions from the parties – including from the appellant's wife – before ruling on the request.

[21] Finally, we are not persuaded that the fresh evidence sought to be tendered on appeal by the appellant, if admitted at trial, would have yielded a different outcome.

[22] The appellant sought to defend the mortgage action solely on the basis that a family trust, rather than the appellant, was the legal and beneficial owner of the mortgaged property and liable for the mortgage debt. This claim was unequivocally rejected by Bielby J. when he granted judgment to the respondents for possession of the property. It is also unsupported by the mortgage itself, including the standard charge terms containing the appellant's covenant to pay, the certificate of independent legal advice furnished by the appellant's solicitor in relation to the mortgage transaction, the mortgage commitment letter, and various other documents related to the mortgage loan. In any event, in documents filed with the court by the appellant on a summary judgment motion in his solicitor's negligence action, the appellant expressly acknowledged that he, rather than the trust, was the legal owner of the mortgaged property and that the relevant mortgage documents contained his personal covenant to repay the mortgage loan. He has therefore now essentially admitted that the defence sought to be advanced by him in the mortgage action is factually and legally unsupportable.

[23] For all these reasons, the appellant's proposed defence of the action and this appeal are devoid of merit.

Disposition

[24] The appellant's application for leave to admit fresh evidence on appeal and the appeal are both dismissed. The respondents are entitled to their costs of the appeal, fixed in the amount of $15,000, inclusive of disbursements and all applicable taxes.

[25] The sum of $10,000 is currently held in court as security for the costs of this appeal. These funds shall be paid out of court to the respondents' solicitors, in trust, in partial satisfaction of the costs of the appeal now awarded to the respondents, upon request therefor in proper form filed by the respondents.

K. Feldman J.A. E.A. Cronk J.A. B.W. Miller J.A.