Court of Appeal for Ontario

Date: 2025-07-29
Docket: M56142 (COA-25-CV-0857)
Judge: Patrick J. Monahan (Motion Judge)

Between:
Hermina Developments Inc.
Applicant (Appellant/Moving Party)

and

Epireon Capital Limited and Pro-M Capital Partners Inc. (amalgamated with Forsgate Inc. previously known as Forsgate Funding Corporation Inc.)
Respondent (Respondent/Responding Party)

Appearances:
Caroline Abela and Claire Copland, for the moving party
Eric Golden and Summer Xia, for the responding party

Heard: July 22, 2025

Reasons for Decision

Introduction

[1] The moving party and appellant, Hermina Developments Inc. (“Hermina”), seeks a stay of the order of the motion judge permitting the respondents to sell a 26.7-acre parcel of land located in Woodstock, Ontario (the “Subject Property”), pursuant to an agreement of purchase and sale entered into by the respondents in the appeal with an arm’s length third party (the “APS”).

Background

[2] Hermina purchased the Subject Property for development in 1999. In 2008, Hermina registered two mortgages on the property, the first in favour of a non-party to the proceedings and the second in favour of the respondents in the principal amount of $4.25 million, with an annual interest rate of 14.875%.

[3] Hermina defaulted on both mortgages on January 4, 2009 by failing to redeem them on maturity.

[4] On March 2, 2009, the respondents delivered a notice of sale under the second mortgage. The sale process was interrupted when, according to the respondents, the director of the moving party, Wiebe Scheltema, damaged the For Sale signs and threatened to burn them.

[5] The respondents moved for summary judgment on the second mortgage. On July 24, 2009, on consent, judgment was granted in favour of the respondents in the amount of approximately $4.77 million, plus interest at 14.875% from June 25, 2009 onward, along with an order that the moving party deliver possession of the Subject Property.

[6] Between 2009 and 2021, the respondents made various efforts to sell the Subject Property, without success.

[7] On October 7, 2021, the respondents issued a second notice of sale for the Subject Property. The Property was listed for sale and various offers were received, which eventually led to the entering into of the APS. The sale transaction under the APS is currently scheduled to close on August 1, 2025.

[8] The moving party has not paid any amounts on account of the second mortgage since 2009 and it remains in possession of the Subject Property. The amount outstanding on the second mortgage as of February 3, 2025 is $14,365,000.

[9] The Property has not been developed and is vacant and unimproved land. The moving party permits farmers to use the land to grow crops such as corn and soybeans, and also uses part of the property for a sandblasting business.

[10] Upon learning of the sale contemplated by the APS, the moving party sought an order preventing the closing of the transaction. The motion judge dismissed the motion and permitted the closing of the transaction to proceed. He also imposed a sealing order on the APS and on the value of appraisals and offers for the Subject Property received by the respondents since 2021 until such time as the transaction closes.

Motion for a Stay Pending Appeal

[11] The moving party seeks a stay of the motion judge’s order permitting the respondents to sell the Subject Property, pending the determination of its appeal of the order. It argues that it meets the test for a stay pending appeal under r. 63.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which requires consideration of the following factors:

(1) is there a serious question to be tried on appeal;
(2) will the moving party suffer irreparable harm if the application is refused; and
(3) does the balance of inconvenience favour granting the stay.

See Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), at pp. 676-77; Wilfert v. McCallum, 2017 ONCA 895, 54 C.B.R. (6th) 249, at para. 6; and Cavalho Estate v. Verma, 2024 ONCA 222, 170 O.R. (3d) 781, at para. 5.

[12] These three factors are designed to assess the prejudice to the parties if the stay order is granted or refused, with the ultimate test being “whether the interests of justice call for a stay”: Zafar v. Saijid, 2017 ONCA 919, at para. 18.

[13] If the stay is granted, the moving party also seeks an order under s. 134(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 requiring the respondents to provide counsel for the moving party with the information sealed by the motion judge.

Discussion

[14] I am satisfied that there is a serious issue to be tried on appeal.

[15] However, the moving party has failed to establish that it will suffer irreparable harm if the stay is not granted, and the balance of convenience militates against granting the stay.

[16] The moving party argues that it will suffer irreparable harm because once the sale transaction closes there will be no way for it to recover the Subject Property even if it is successful on the appeal. It argues that this will render the appeal moot before it is heard. It relies on this court’s decision in M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, 51 C.P.C. (8th) 253, in which a vesting order for the sale of land was stayed.

[17] I see no merit to this argument.

[18] Irreparable harm is harm that “either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other”: RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 341. Thus, the relevant question is not whether the moving party will be able to recover the Subject Property if successful on appeal but, rather, whether any losses resulting from the closing of the APS could be quantified and cured through an award of damages.

[19] An award of monetary damages might be insufficient if the Subject Property had some unique or distinctive characteristics. This was the basis of the stay in M & M, where the unique characteristics of the property in question included the fact that it was located adjacent to the defendant’s planned residential development.

[20] There are no such unique characteristics in respect of the Subject Property. It is vacant land being used for farming and a sandblasting operation and is intended for development. The moving party claims that it is unique because it is a large parcel of land that has frontage on Highway 401 and is close to central Woodstock, Ontario. The moving party relies on a report appraising the value of the Property, which includes a table comparing the Subject Property with three other properties that have sold in the area recently. The moving party argues that these recently sold properties are either smaller than the Subject Property or are located some distance away.

[21] A comparison of the Subject Property with three other parcels of land that happen to have been sold in the area recently does not establish that the Property is somehow unique or distinctive. While the Property’s proximity to the 401 and to the city of Woodstock may make it more valuable than would otherwise be the case, I see no evidence that these characteristics are unique to this Property. In short, the moving party has not shown that any potential losses resulting from the closing of the APS could not be quantified and cured through an award of damages. There is also no evidence to suggest that the respondents lack the financial ability to satisfy a monetary judgment.

[22] The balance of convenience also militates against granting the stay.

[23] The moving party is impecunious and, since the Subject Property is its only asset, the Property represents the only recourse available to the respondents to realize the amount owing pursuant to the second mortgage and the 2009 consent judgement.

[24] The respondents have been attempting to sell the Subject Property since 2009 without success. Taking into account the accumulated interest, the total amount owing pursuant to the second mortgage exceeds the sale price under the APS. Thus, if the stay is granted, the losses sustained by the respondent will continue to mount, with no prospect that the respondents will ever be able to recover such amounts from the moving party. On the other hand, if the sale transaction proceeds but is later found to have been in breach of the moving party’s rights, such losses can be properly compensated through an award of damages against the respondent.

[25] Taking into account the above considerations and viewing the matter holistically, granting the stay would not be in the interests of justice.

[26] The motion for a stay is dismissed. As a result, I need not consider the secondary relief sought by the moving party relating to the release of the information under seal.

[27] The respondents are entitled to costs of the motion on a partial indemnity basis in the amount of $5,000, all inclusive.

“P.J. Monahan J.A.”