COURT OF APPEAL FOR ONTARIO DATE: 20220503 DOCKET: C68367

Lauwers, Nordheimer and Zarnett JJ.A.

BETWEEN

Flex Park Inc. Plaintiff (Respondent)

and

Ida Covello Defendant (Appellant)

Counsel: Ida Covello, acting in person Craig A. Mills and Madeleine Dusseault, for the respondent

Heard: April 28, 2022

On appeal from the order of Justice Howard Leibovich of the Superior Court of Justice, dated April 22, 2020, with reasons at 2020 ONSC 1799.

REASONS FOR DECISION

[1] Ida Covello appeals from the order of the motion judge that dismissed her motion to set aside a default judgment that the respondent had obtained against her arising out of a mortgage. At the conclusion of her submissions, Ms. Covello asked for a two-week adjournment of the appeal because her lawyer would be available at that time. We declined to grant the adjournment. The hearing of this appeal has been set since January and the appeal itself is two years old. Further, the hearing has already been adjourned on consent once, in January, in order to allow the appellant additional time to find a lawyer. It was simply too late for the appellant to seek another adjournment, with no prior notice, in those circumstances.

[2] Turning to the appeal itself, in November 2017, the respondent advanced funds to the appellant pursuant to a second mortgage that was registered against the appellant’s property, 181 Wigwoss Drive in Woodbridge, Ontario. The mortgage proceeds were used to discharge an existing second mortgage and other debts of the appellant.

[3] Following a default on the mortgage, the respondent obtained a default judgment against the appellant on December 13, 2019. On April 2, 2020, about seven months after having been served with the statement of claim and four months after receiving notice of the default judgment, the appellant brought a motion to set aside the default judgment.

[4] There is no dispute that the appellant entered into a mortgage agreement, that she had the advice of independent legal counsel before doing so, that the mortgage funds were advanced, and that she defaulted on the mortgage. There is also no dispute that the appellant was served with the statement of claim and, subsequently, the default judgment. The appellant never delivered a defence to the respondent’s claim, even after the motion judge gave her a further opportunity to do so.

[5] Rather, the appellant now submits that the mortgage is fraudulent. This allegation arises out of the fact that, since the time of this mortgage, the respondent has discovered that a clerk in the offices of its lawyer falsified information about the amount of existing mortgages on properties. This falsified information led to the respondent giving mortgages that would not have been advanced had the true state of affairs regarding prior encumbrances on the properties been known.

[6] In furtherance of the appellant’s position, she now seeks to put various documents before this court pursuant to a fresh evidence motion. These documents deal with other proceedings and information relating to the apparent fraud of this law clerk. She also now alleges that there are other documents relating to the fraud that have not been disclosed to her.

[7] The appellant’s contention that the mortgage in question was tainted by these alleged fraudulent activities was rejected by the motion judge. He found that there was no evidence that the fraudulent activity had been to the appellant’s detriment. The fraudulent activities of the law clerk had put the respondent’s position at risk in other transactions but that had nothing to do with the appellant’s mortgage. The motion judge applied the proper test for setting aside a default judgment and found no basis to do so.

[8] The appellant has failed to establish any error in the motion judge’s decision. We agree with him that the activities of the law clerk did not impinge on the validity of the appellant’s mortgage or undermine its enforceability in any way. The appellant defaulted on the mortgage and the judgment that the respondent obtained was a proper one.

[9] We do not accept the appellant’s assertion that there was an obligation on the respondent to provide fuller information to the motion judge regarding the matters involving the law clerk. Those matters were not relevant to the issues that were before the motion judge and there was, therefore, no reason for the respondent to bring all of those details to the attention of the motion judge.

[10] The appellant also relies on the Unconscionable Transactions Relief Act, R.S.O. 1990, c. U.2. This issue was not raised before the motion judge. In any event, we do not see how that statute has any relevance to the issues involved in this case. There is no basis for any suggestion that the cost of the mortgage was excessive in a way that could bring the provisions of that statute into play.

[11] Finally, we would not admit the fresh evidence. It does not satisfy the test for the admission of fresh evidence set out in cases such as Palmer v. The Queen, [1980] 1 S.C.R. 759. In particular, this evidence would not have affected the result of the motion.

[12] The appeal is dismissed. The respondent is entitled to its costs of the appeal fixed in the amount of $10,000 inclusive of disbursements and H.S.T.

“P. Lauwers J.A.” “I.V.B. Nordheimer J.A.” “B. Zarnett J.A.”