Court of Appeal for Ontario

Date: 20210616 Docket: M52435 (C69127)

Fairburn A.C.J.O., Harvison Young and Jamal JJ.A.

BETWEEN

Sub-Prime Mortgage Corporation and Elle Mortgage Corporation Plaintiffs (Respondents/Responding Parties)

and

David Kaweesa, Jacqueline Kaweesa and Jeremy Kaweesa Defendants (Appellants/Moving Parties)

AND BETWEEN

David Kaweesa and Jacqueline Kaweesa Plaintiffs by Counterclaim (Appellants/Moving Parties)

and

Sub-Prime Mortgage Corporation, Elle Mortgage Corporation and Terry Walman Defendants by Counterclaim (Respondents/Responding Parties)

Counsel: Matthew Tubie, for the moving parties Ranjan Das, for the responding party Terry Walman Glenn Cohen, for the responding parties Sub-Prime Mortgage Corporation and Elle Mortgage Corporation

Heard and released orally: June 8, 2021 by video conference

Reasons for Decision

[1] The background to this motion is a mortgage enforcement action brought by a number of mortgagees who moved before Paciocco J.A. for an order for security for the costs of the appeal, among other things. The asset in issue is the heavily encumbered house owned by the moving parties. Paciocco J.A. granted the motion for security for costs. He also lifted the temporary stay on the enforcement of the writ of possession which the motion judge, Stinson J., had granted for 90 days, expiring May 11, 2021. The moving parties seek to set aside both orders and ask this court to grant an order staying Stinson J.’s order in its entirety.

[2] We begin with the security for costs motion. We see no basis for setting aside Paciocco J.A.’s order in full or in part. There is no dispute that the correct test is as set out in r. 61.06(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and applied in Heidari v. Naghshbandi, 2020 ONCA 757, 153 O.R. (3d) 756. The moving parties argue that Paciocco J.A. erred in finding that there was “good reason to believe” that the appeal is frivolous and vexatious, and that the moving parties have insufficient assets in Ontario to pay the costs of the appeal.

[3] We do not agree with the moving parties that Paciocco J.A. erred in finding that there is good reason to believe that the grounds of appeal are frivolous in that they are “devoid of merit, with little prospect of success”: see Heidari, at para. 10. Paciocco J.A. considered each ground of appeal advanced.

[4] First, we see no error of law or fact in relation to the finding made by both Stinson J. and Paciocco J.A. that the pandemic did not frustrate the minutes of settlement. The pandemic was well underway when the minutes were executed in November 2020.

[5] Second, we see no error on the part of Paciocco J.A. with respect to his treatment of the ground of appeal that the responding parties had failed to comply with the terms of the minutes requiring counsel to cooperate with the moving parties’ refinancing attempts. As Paciocco J.A. concluded, there is no evidentiary basis for that argument.

[6] Stinson J., who presided over the underlying motion giving rise to this review, had extensive involvement with this matter and had conducted the settlement conference. One of the grounds of appeal is that Stinson J. erred in doing so. We do not agree with the moving parties’ claim that Paciocco J.A. erred in finding that there were grounds to believe that this ground was devoid of merit. In doing so, Paciocco J.A. specifically noted that r. 50.10(1) permits pre-trial conference judges to preside at the trial of an action with the written consent of the parties, which was expressly provided for in the minutes of settlement. The minutes of settlement provided, at para. 19, that Stinson J. would “remain seized of this action … for any purpose in connection with implementing these Minutes of Settlement”. Moreover, Stinson J. specifically raised the issue with counsel, who referred him to para. 19 in agreeing that he hear the contested motion.

[7] In addition, we see no basis for interfering with Paciocco J.A.’s finding that the appeal is “vexatious” as it has been taken to annoy or embarrass the responding parties or conducted in a vexatious manner: see Heidari, at para. 10. Paciocco J.A.’s reasons for this finding are well grounded in the record and are owed deference by this court in the absence of palpable and overriding error or error in principle, which the moving parties have not shown.

[8] With respect to the adequacy of the moving parties’ assets, the moving parties also claim that Paciocco J.A. erred in his application of r. 61.06(1)(a), which requires a finding that the appellant has insufficient assets in Ontario to pay the costs of the appeal. We see no error. The moving parties have not been making payments on the encumbrances on the house for a significant period of time and, in some cases, years. The quantum of accumulated interest, as Paciocco J.A. noted, “which only continues to mount, is staggering”.

[9] With respect to the claim that Paciocco J.A. erred in refusing to continue the stay, it has already expired and is therefore moot. We see no basis for reinstating it now.

[10] The motion to set aside the order of Paciocco J.A. is therefore dismissed.

[11] Costs in the agreed amounts of $2,500 inclusive of disbursements and HST to Mr. Cohen’s clients, Sub-Prime Mortgage Corporation and Elle Mortgage Corporation, and $750 inclusive of disbursements and HST to Mr. Das’ client, Mr. Walman.

“Fairburn A.C.J.O.” “A. Harvison Young J.A.” “M. Jamal J.A.”