Court of Appeal for Ontario

Date: October 15, 2019 Docket: C66529 Judges: Tulloch, Hourigan and Benotto JJ.A.

Between

Peter Pichelli, Todd Leslie, Frank Toth and 958041 Ontario Limited Appellants

and

Adair Barristers LLP, Geoffrey D.E. Adair, and Tracy Adair Respondent

Counsel

Douglas Cunningham, for the appellants

David Steinberg, for the respondent Tracy Adair

Heard and Released Orally

October 15, 2019

Appeal

On appeal from the judgment of Justice Lemay of the Superior Court of Justice, dated January 8, 2019.

Reasons for Decision

[1] The respondent is the assignee of a debt alleged to be owed to her husband for his legal services provided in litigation related to the development of certain real property. The respondent registered a mortgage on the property to secure the debt. The appellants claim beneficial ownership interests in the property.

[2] The appellants' position is that the respondent could not validly register the mortgage because there was no evidence that a debt was owed to her husband. As a result of the lack of an established debt, the appellants submit that, based on unjust enrichment and misrepresentation on title, the respondent is not entitled to receive the monies secured by the mortgage on a sale of the property.

[3] We do not accept this submission. The motion judge found that there was a debt owing. This finding was supported by the testimony of the respondent's husband, and by the fact that the property owner consented to the registration of the mortgage. We note that an appeal against the respondent's husband was not pursued.

[4] Moreover, any beneficial ownership by the appellants would arise by way of trust. Even where an owner of land is described as a trustee, pursuant to s. 62(2) of the Land Titles Act, R.S.O. c. L.5, absent a caution on title, a party may deal with the registered owner without inquiring as to the owner's power to grant a charge against title. The respondent is a bona fide purchaser for value with a registered interest in the property; her interest trumps any unregistered interest of the appellants in the property that pre-existed the granting of the mortgage: Di Michele v. Di Michele, 2014 ONCA 261, 319 O.A.C. 72, at para. 107.

[5] There is also no basis for a claim of unjust enrichment. There is a juristic reason for the benefit the respondent received. Her husband validly assigned to her the debt.

[6] For these reasons, we dismiss the appeal, with costs fixed in the all-inclusive amount of $12,000 to the respondent.

M. Tulloch J.A.

C.W. Hourigan J.A.

M.L. Benotto J.A.