Court File and Parties
Court File No.: 11-CV-433602
Date: February 28, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
The Equitable Trust Company
Plaintiff
- and -
Aliamisse Omar Mundulai and Ying Huang
Defendants
COUNSEL:
• B. Whealen for the Plaintiff
• A. Mundulai, self-represented
HEARING DATE: February 27, 2012
PERELL, J.
REASONS FOR DECISION
[ 1 ] The Plaintiff, the Equitable Trust Company, moves for a summary judgment for possession of a mortgaged property and for dismissal of the Defendants’ counterclaim for damages for breach of a mortgage contract, which counterclaim, during argument, the Defendants submitted was worth $20,000, inclusive of legal fees.
[ 2 ] The Defendants Aliamisse Omar Mundulai and Ying Huang are mortgagors under a five-year $133,000 mortgage. The mortgage matures on May 5, 2012. The mortgage requires monthly payments of $1,808.78.
[ 3 ] On June 5, 2011, the Defendants’ mortgage payment did not clear an automatic bank account payment, and the mortgage went into default. For the next eight months, the Plaintiff rebuffed the Defendants’ efforts to pay the arrears and to bring the mortgage into good standing. During this time, the Plaintiff took the position that the mortgage was in default, and it issued a power of sale on July 13, 2011, and it commenced this action for possession in August 2011.
[ 4 ] The Defendants delivered a Statement of Defence and Counterclaim in September 13, 2011.
[ 5 ] Oddly, it appears that from the time of the default until today, the Plaintiff wanted to be paid and the Defendants wanted to pay the mortgage debt. The problem, however, was that the Defendants tendered uncertified cheques for their arrears payments and for the ongoing monthly payments. But, the Plaintiff refused to negotiate any uncertified cheques. It demanded certified cheques, and it refused to reactivate the automatic withdrawals from the Defendants’ account.
[ 6 ] In refusing the Defendants uncertified cheques, the Plaintiff took the position that uncertified cheques had to be replaced by certified cheques. The Plaintiff relied on the following provision in the mortgage:
The Chargor covenants and agrees with the Chargee as follows:
- To pay to the Chargee its administration and/or servicing fees for the following matters in the amounts set forth:
(a) Missed Payment Fee (payable for each missed or late installment and for processing each “NSF” cheque or other returned payment - $200. Provided that if any cheque is returned NSF, any replacement cheque must be certified. If such replacement cheque is not certified, the Chargee shall be entitled to have it certified and to add all the costs of certification (including courier charges to and from the Chargor’s Bank) to the amount owing on the Mortgage
[ 7 ] I will return to the matter of whether the Plaintiff’s position demanding certified cheques is correct below, but for present purposes, it is not necessary to detail the state of the mortgage indebtedness because the payment of the mortgage indebtedness came to be governed by a court order. The Plaintiff moved for a summary judgment, and the motion was originally returnable on November 25, 2011, but Mr. Mundulai was granted an adjournment on terms that the mortgage payments be made without prejudice to the position of the parties as to whether the mortgage was in default.
[ 8 ] Recently, during February, 2012, the Plaintiff did accept payments, and these payments brought the mortgage into good standing, except for the Plaintiff’s claim for costs. Indeed, the Defendants overpaid the Plaintiff by $2,000.
[ 9 ] Unfortunately, the current positive state of affairs was not arrived at without difficulties. The Defendants mistakenly anticipated that the Plaintiff would reactive the automatic withdrawals, and, thus, the mortgage payments pursuant to the court order did not go off without hitch, although the mortgage account is now in good standing.
[ 10 ] In any event, with the mortgage now in good standing, the Plaintiff seeks its legal costs on a substantial indemnity basis as prescribed by the mortgage. It submitted a bill of costs claiming $15,520.59.
[ 11 ] In these circumstances with the costs unpaid, the Plaintiff takes the position that the mortgage is in default, and it moves for a summary judgment for possession, for costs, and for a dismissal of the counterclaim. The Defendants’ position is that there are genuine issues for trial and that the motion for a summary judgment should be dismissed.
[ 12 ] Deciding this motion is problematic because, in my opinion, neither party is blameless. As for the Defendants, in my opinion, subject to the matter of costs, the Defendants are now in good standing; however, their initial default was real, and there were at least technical breaches of the court’s interlocutory order to keep the mortgage in good standing. Further, there is reason to doubt the genuineness of their counterclaim because Mr. Mundulai deposed that he was prepared to settle the Plaintiff’s claim on terms that Mr. Mundulai receive invoices for the expenses claimed by the Plaintiff. Moreover, the Defendants did not provide any evidence of suffering any losses and, as already noted, they were technically in breach from time to time.
[ 13 ] As for the Plaintiff, in my opinion, its reliance on the replacement cheque provision was mistaken. The provision states that “provided that if any cheque is returned NSF, any replacement cheque must be certified.” Thus, it was a precondition of invoking the certified cheque provision, that the Plaintiff have an NSF cheque to be replaced by a certified cheque However, except for the June default, there was no NSF payment upon which to demand certified cheques, and thus the Plaintiff ought to have deposited the cheques tendered by the Defendants.
[ 14 ] Neither party is blameless, but the mortgage is now in good standing save for costs. Both parties are claiming costs, and both demonstrate that there is no genuine issue that their opponent will be unable to prove a claim for a current default. How then to decide this matter?
[ 15 ] Under rule 37.13(2)(a), a judge who hears a motion may, in a proper case, order that the motion be converted into a motion for judgment: Wilson v. Ingersoll , [1916] O.J. No. 39 (H.C.J.) ; Janisse v. Livesey , [1944] O.J. No. 185 (H.C.J.) ; CMLQ Investors Co. v. CIBC Trust Corp ., [1996] O.J. No. 3171 (C.A.) . The jurisdiction under this rule is narrow, and a judge may resort to it only where the motion for judgment would result in the resolution of the case, either by granting judgment in favour of the plaintiff or dismissing the plaintiff’s action: Centre Town Developments Ltd. v. Hull , [1997] O.J. No. 4458 at para. 12 (Ont. Gen. Div.) ; McNab v. Lechner , [2002] O.J. No. 1530, 21 C.P.C. (5th) 16 (Ont. C.A.) ; Buffa v. Gauvin , 1994 7276 (ON SC) , [1994] O.J. No. 1158 (Gen. Div.) and where all the necessary evidence is before the court and the parties have had full opportunity to argue their positions: CMLQ Investors Co. v. CIBC Trust Corp. , [1996] O.J. No. 3171 (C.A.) ; Chrysalis Restaurant Enterprises Inc. v. 212 King Street West Ltd. , [1994] O.J. No. 1983 (Gen. Div.) .
[ 16 ] Exercising the court’s jurisdiction under the summary judgment rule and under rule 37.13(2) (a), I dismiss the Plaintiff’s action for possession and the Defendants’ counterclaim. As for costs, I order the Defendants to pay the Plaintiff costs on a partial indemnity basis in the amount of $7,000, all inclusive.
[ 17 ] The explanation for the costs award is that: (a) the Defendants were initially at fault and the Plaintiff was entitled to commence the power of sale proceeding; (b) there were technical defaults by the Defendants of the court’s interlocutory order; and (c) the Defendants indicated that they were prepared to pay the Plaintiff’s expenses if invoices were provided.
Perell, J.
Released: February 28, 2012
COURT FILE NO.: 11-CV-433602
DATE: February 28, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
The Equitable Trust Company
Plaintiff
‑ and ‑
Aliamisse Omar Mundulai and Ying Huang
Defendants
REASONS FOR DECISION
Perell, J.
Released: February 28, 2012.