COURT FILE NOS.: 08-CV-364585 and 08-CV-352871

DATE: 20120925

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Peoples trust companY , Plaintiff

AND:

NADIRE ATAS , Defendant

AND RE: Peoples trust companY , Plaintiff

AND:

66381 oNTARIO LIMITED and NADIRE ATAS , Defendants

BEFORE: Stinson J.

COUNSEL:
Christina Wallis , for the Plaintiff/Responding party

Raj Napal , for the Defendants/Moving parties

HEARD: September 12, 2012

ENDORSEMENT

[ 1 ] This endorsement applies to the defendants' motions that were returnable on September 12, 2012 in both of the above matters. Neither motion proceeded on that date. Rather, they were adjourned at the request of the defendants. I will describe in this endorsement the terms of the adjournments. Before doing so, some factual context is appropriate.

action no. 08-cv-364585

[ 2 ] In this mortgage action, the plaintiff Peoples Trust Company obtained judgment against the defendant Nadire Atas on May 11, 2009 for payment and possession of a property owned by Atas at 11 Wycliffe Avenue, Hamilton, Ontario. The judgment was granted by Aston J. on a motion for summary judgment brought by Peoples. The Aston Judgment awarded Peoples the total sum of $175,726.95 (inclusive of principal, interest and costs) plus post-judgment interest at the rate of 6.5 percent per year.

[ 3 ] Atas has made several attempts to set aside or appeal the Aston Judgment, without success. These included an appeal to the Court of Appeal that ultimately was dismissed for delay in December 2011.

[ 4 ] In addition to its action for payment and possession of the Wycliffe property, Peoples issued a notice of sale under mortgage. In July 2009, subsequent to the Aston Judgment, Peoples accepted an offer to purchase the property under its power of sale. At around the same time, Atas herself was engaged in efforts to sell the property and she too accepted an offer to purchase. The sale proceeds from the Atas sale would have been insufficient to redeem the mortgage, but Peoples agreed with Atas to discharge the mortgage on the condition that Atas agree that Peoples could proceed with enforcement proceedings on the Aston Judgment to collect the deficiency that resulted from the sale. Among other documentation, Atas signed an acknowledgement and direction specifying that:

(1) a deficiency would result following the application of the sale proceeds to the mortgage debt;

(2) Atas agreed that the deficiency due under the mortgage would remain payable under the Aston Judgment; and

(3) Peoples could collect and enforce the remaining indebtedness under the mortgage by all rights available to it under the mortgage and the Aston Judgment.

[ 5 ] Pursuant to the foregoing arrangement, the Wycliffe property was sold on August 25, 2009. According to Peoples, after application of the sale proceeds received, there remained a balance owing on the mortgage debt of $30,725.09.

[ 6 ] Prior to the completion of the sale, Peoples filed writs of execution with the Sheriff in Hamilton and the Sheriff in Toronto seeking to collect the full amount of the Aston Judgment. As well, Peoples served on the real estate agent with whom Atas was then associated (Sutton Group – Associates Realty Inc.) a notice of garnishment seeking to collect the full amount of the Aston Judgment. In February 2010, Peoples served another notice of garnishment on a further real estate agent with whom Atas was then associated (Sutton Group Realty Systems Inc.) seeking payment of $40,176.50 (the net sum then allegedly due) arising from the Aston Judgment. Peoples has received no payment pursuant to either writ of execution or either notice of garnishment.

[ 7 ] In addition to the specific steps taken or attempted by her to attack the Aston Judgment, Atas has engaged in a series of legal skirmishes with Peoples over the past several years. I do not propose to recite all of them; suffice to say that, in responding to various steps taken by Atas, Peoples claims to have expended approximately $80,000 in legal costs.

[ 8 ] At the time the property was sold, Peoples calculated the balance owing on the mortgage at $30,725.09. This amount was calculated after deducting legal expenses incurred to that time of $34,207.58. Since that time, taking into account the interest that has accrued, and other legal expenses incurred by it, and netting out awards of costs made in its favour by various judges, Peoples calculates the amount due to it as at August 7, 2012 at $100,546.25.

[ 9 ] Atas is engaged in other litigation with Peoples and in a significant number of other legal proceedings involving a range of parties and causes of action. In the spring of 2012, I was appointed the case management judge with responsibility for these various proceedings. I have so far held three case conferences with Ms. Atas and the lawyers for the parties opposite with a view to approaching and coordinating the litigation in such a fashion that it can be addressed as efficiently and swiftly as possible. Among other complications is the fact that, at one stage, and at Ms. Atas' own request, due to concerns regarding her legal capacity, the Public Guardian and Trustee was appointed as her litigation guardian to represent her interest in some of these proceedings. Ms. Atas has since sought to set aside the appointment of the PGT on the ground that she no longer lacks legal capacity; the capacity issue is one of the principal steps being addressed by me as case management judge.

[ 10 ] In the past, Ms. Atas has been employed as a real estate agent. For a period of time, her licence to act as a real estate agent was in abeyance. Near the end of July 2012, however, Atas succeeded in having her real estate licence reissued. She became concerned, however, that in light of the outstanding notices of garnishment, she would not be in a position to collect any income that she might earn as a real estate agent, since she is an independent contractor. As a result, the 80% exemption provided by s. 7(2) of the Wages Act, R.S.O. 1990, c. W.1 would not apply to limit the size of the deductions made from her earnings out of real estate commissions, pursuant to the outstanding notices of garnishment.

[ 11 ] Despite the fact that in my case management of the proceedings I directed that, logically, the first issue to be resolved should be the issue regarding Ms. Atas' capacity to represent herself and to litigate on her own behalf, Atas requested that I schedule an urgent motion to address the garnishment issue. I agreed to do so, in light of Atas' assertion that she was being deprived of the opportunity to earn a living. I fixed September 12, 2012 as the date for argument of that motion, and gave directions regarding the timing for the exchange of materials.

[ 12 ] Atas did not meet the deadline set by me for delivery of her materials. When she ultimately did deliver her notices of motion, she sought a broad range of relief, not limited to varying or lifting the notices of garnishment. Specifically, her notice of motion in Court File No. 08-CV-364585 sought the following relief:

(a) an order to vacate the Aston Judgment;

(b) an order to vacate the writ of execution dated August 20, 2009;

(c) an order to vacate the notice of garnishment dated August 19, 2009;

(d) an order to vacate the notice of garnishment dated February 3, 2010;

(e) an order setting aside the executed Acknowledgment dated August 24, 2009;

(f) an order to vacate the Statement of Amount Owing Under Judgment as at August 7, 2012 for Court file 08- CV-364585;

(g) an order that the plaintiff provide to the defendant, all correspondence between the plaintiff and brokerages, banks and financial institutions, bearing Court File No. 08- CV-364585;

(h) an order that the plaintiff provide to the defendant an accounting of all expenses and interest, including legal fees, related to the mortgage registered on title to the Wycliffe property;

(i) an order that the plaintiff be deprived of its costs for its conduct in Court File 08- CV364585;

(j) an order to reopen the transaction and take an account between the plaintiff and the defendant;

(k) an order to reopen the account already taken and relieve the defendant from payment of any sum in excess of the sum adjudged by the court to be fairly due in respect of the principal and the cost of the loan on the mortgage;

(l) an order directing the plaintiff to repay any such excess if the same has been paid or allowed on account by the defendant;

(m) an order to set aside either wholly or in part or revise or alter any security given or agreement made in respect of the money lent, and, if the plaintiff has parted with the security, directing the plaintiff to indemnify the defendant;

(n) an order that the plaintiff be deprived of its costs for its conduct; and

(o) an order that the plaintiff pay costs for its conduct

[ 13 ] Atas accompanied her notice of motion with an 82 paragraph affidavit coupled with Exhibits comprising some 292 pages.

[ 14 ] As a result of the scope of the relief sought by Atas, Peoples wrote to me requesting directions regarding the scope of the motion that I had agreed to schedule for September 12, 2012. Unfortunately, I was absent on vacation when that request came in, but before the return date I corresponded with the parties confirming that the purpose of the September 12 hearing was to deal with the notices of garnishment only. In the meantime, Peoples filed a lengthy affidavit reciting in detail the history of the matter and explaining step by step the various actions taken by it to enforce its mortgage and to collect the indebtedness allegedly owing to it.

[ 15 ] On the occasion of the return date on September 12, 2012, Raj Napal appeared as counsel for Atas. Mr. Napal indicated that he was retained to argue the motion relating to the lifting of the notices of garnishment. At the outset, however, he stated that he had had insufficient time to prepare, that the motion materials prepared by Atas were inadequate, no factum had been filed on her behalf and that he was not prepared to proceed. Instead, on her behalf, he requested an adjournment to permit him to file "more focused" materials.

[ 16 ] Counsel for Peoples resisted the adjournment noting that the motion date had been set as it was on the basis of the representation of Atas that it was urgent. As well, Atas had, in her notice of motion, raised a broad range of issues not limited to the original purpose for the motion, namely, the lifting of the notices of garnishment.

[ 17 ] After considerable discussion, it became apparent that the grounds recited in the Atas notice of motion raised a range of issues that were unsuitable for resolution in the context of a motion, if they were appropriate for revisiting at all, given the history of the matter. The specified grounds recited in the notice of motion were as follows:

(a) Nadire Atas was the Mortgagor on mortgage registered at 12 Wycliffe Ave. Hamilton, on July 6, 2005, the sum of $165,000.00, for a three year term mortgage.

(b) Nadire Atas is the Defendant in the Judgment on the Mortgage, being Court File No. 08- CV-364585

(c) There was a fundamental mistake such that there was no consensus ad idem on the Acknowledgement date August 24, 2009.

(d) the Acknowledgement dated August 24, 2009, is unconscionable

(e) The Defendant Nadir Atas, was illegitimately pressured and put in position where she had no "realistic alternative" but to submit, under coercion, duress or economic duress to execute the Acknowledgment dated August 24, 2009

(f) The Plaintiff resisted the right of the Defendant to redeem in August 2009

(g) The Plaintiff/Mortgagee demanded the execution of the Acknowledgment dated August 24, 2009 by the Defendant/Mortgagor as a condition to redeem

(h) The Plaintiff/Mortgagor [sic] entered into an agreement or arrangement to receive, payments for advancing credit exceeding 60% of the total value of the credit advanced, an offense under section 347 of the Criminal Code .

(i) The Plaintiff/Mortgagee made unfounded claims

(j) The Plaintiff/Mortgagee improperly refused to account for costs and interest

(k) Plaintiff/Mortgagee caused vexatious delays and unnecessary costs,

(l) The Plaintiff/Mortgagee is guilty of vexatious or oppressive conduct

[ 18 ] Mr. Napal indicated that Atas wished to assert those complaints, but he acknowledged that the motion procedure adopted by Atas was not suited for most of them.

[ 19 ] After some discussion it ultimately emerged that, at this juncture, Atas seeks to have the court decide on motion a significantly narrower issue, namely, the correct basis for calculating the sum due, if any, on account of the Aston Judgment and hence the outstanding writs of execution and notices of garnishment. More particularly, the question to be resolved seeks a determination by the court of the correct interpretation and application of the terms of the mortgage, the terms of the acknowledgement signed by Atas at the time the property was sold and the mortgage was discharged, and the correct application of the proceeds of sale: i.e. to the mortgage debt or to the judgment. Based on the resolution of that issue, Atas could pursue a declaration that the judgment was satisfied, that the writs of execution should be lifted and the notices of garnishment should be lifted as well.

[ 20 ] In light of the foregoing "refocusing" of the relief sought in her motion, Atas sought to adjourn it to permit her to file revised material that would be confined to those specific issues. She further agreed to withdraw the relief sought in paragraphs (e), (f), (g), (h), (i), (j), (k), (l), (m), (n) and (o) of her August 10, 2012 notice of motion. She further agreed to refrain from asserting the grounds recited in that notice of motion at paragraphs (c), (d), (e), (f), (g), (h), (i), (j), (k) and (l). The withdrawal of that relief request and those grounds was subject to the reservation by Atas that while she would not seek that relief or rely on those grounds on the argument of this motion, she was reserving her right to seek such relief or to advance such grounds elsewhere.

[ 21 ] Counsel for Peoples argued that, if an adjournment were to be granted, costs should be awarded in her client's favour by reason of the expense and trouble to which it had been put in responding to the broad scope of the Atas motion materials as originally prepared and served. She also submitted that there was no true urgency to the Atas motion relating to the garnishment notices, since they were served several years ago on two real estate brokerages with whom Atas is no longer associated; as a result, the notices would not capture commission income earned by her through other brokerages.

[ 22 ] With some reluctance, but with a view to trying to bring order and focus to the proceedings, I agreed to Atas' request for an adjournment of her motion in Action No. 08- CV-364585. I did so on the basis that, when the motion is brought back on for argument in the future, it will be confined to the relief originally sought in subparagraphs (a) through (d), namely, seeking a declaration that the Aston Judgment had been satisfied and that the writs of execution and notices of garnishment should be lifted. The remainder of the relief set out in the original notice of motion will not be sought by way of motion at this time. Additionally, the grounds of relief set out in paragraphs (c) through (k) will not be relied upon at this stage.

[ 23 ] In relation to costs, I will have more to say below.

action No. 08-cv-352871

[ 24 ] In this proceeding, Peoples as mortgagee obtained judgment against the defendants on March 10, 2009 for payment and possession in relation to its mortgage on property at 298 St. George Street, Toronto. Peoples was the mortgagee, 626381 was the mortgagor and Atas was the guarantor (as well as the principal, shareholder and officer of 626381). Before it obtained judgment, Peoples took steps under a power of sale contained in the mortgage and, among other things, served a notice of attornment of rents upon the tenants of the property. Peoples collected rents totaled $18,250 from the tenants between March and June 2009. According to its evidence, Peoples permitted its property management to apply the rent revenues to the operating expenses incurred once it took possession of the property.

[ 25 ] Prior to Peoples selling the property under its power of sale, 626381 sold the property on June 30, 2009. The mortgage was fully paid, but the defendants requested that the plaintiff mortgagee's costs be assessed. The parties therefore agreed that Peoples' claimed costs in the sum of $91,280.09 would be held in the trust account of Peoples' lawyer until an agreement could be reached in relation to costs, or until an assessment of costs had been completed.

[ 26 ] At the request of the defendants, Peoples took out an appointment for the assessment of its costs relating to the mortgage, pursuant to s. 43(3) of the Mortgages Act , R.S.O. 1990, c. M.40. After several adjournments requested by the defendants, the costs assessment was conducted by Assessment Officer A.K. Fedson on May 19, 2010. On August 29, 2011, the Assessment Officer issued a certificate of assessment of costs. The defendants appealed the certificate of assessment of costs and on April 2, 2012, I allowed that appeal and directed a fresh assessment to be carried out by a different Assessment Officer.

[ 27 ] According to the material filed by her in the motion she served in Action 08-CV-352871, Atas asserts that she has not received proper credit for the rents that were attorned and that there has never been any proper accounting for the proceeds of sale of the St. George property.

[ 28 ] Because the mortgage on the St. George property was paid in full out of the proceeds of sale, there was neither deficiency nor any judgment. No steps to enforce by way of writs of execution or notices of garnishment were taken by Peoples in this proceeding. Thus the stated ground for urgency to hear the motion in Action No. 08-CV364585 (that the notices of garnishment were preventing Atas from earning a living) had no application in this proceeding, As well, it became apparent to me that the issues identified in the Atas notice of motion in Action No. 08-CV-352871 should be addressed either in the assessment hearing itself or in a properly scheduled, non-urgent hearing. I further observed that the detailed affidavit material filed by Peoples in response to this motion provides considerable insight into the receipts and disbursements of Peoples and its property manager in relation to this property. With that information in hand, it should be possible for Atas to determine once and for all whether this motion is necessary and, if so, for her to prepare properly focused material, supported by a factum and legal authorities that would warrant the court re-allocating the proceeds of sale and/or the attornment of rents.

[ 29 ] In the circumstances, the defendants' motion in Action No. 08-CV352871 was adjourned at the request of the moving parties, to a date to be fixed, subject to a decision by the moving parties to seek this relief in another form or via the assessment process in relation to the mortgagee's costs of enforcement.

costs

[ 30 ] Counsel for Peoples argued that the court should award costs in favour of her client in the face of the adjournment of the defendants' motions at the request of the moving parties. She pointed out that the adjournment request by the defendants belied the assertion there was urgency (in addition to her submission that the notices of garnishment were of no impact for Atas because she no longer works with the two brokerages to whom those notices were directed). She further pointed out that the materials filed by Atas, including both the notices of motion and the affidavits, addressed a wide range of issues to which Peoples was forced to respond despite the original direction at the case management conference that the September 12 date was to deal with lifting the notices of garnishment. In addition to the requirement of preparing a thorough and detailed response to all of the allegations made by Ms. Atas in her materials, counsel pointed out that she found herself dealing with Ms. Atas on a frequent basis in the roll up to the argument of the motions before me. She asked for an award of substantial indemnity costs in each matter: in 08-CV364585 the amount sought was $17,012.48; in 08-CV-352871, the amount sought was $10,087.24; in all the costs claims exceed $27,000.

[ 31 ] On behalf of Atas, Mr. Napal argued that the amounts claimed for costs of the motions that did not even proceed were in excess of what might be awarded following a three day trial. He argued that the costs award should be reserved to a later date and should be awarded in the cause, on the theory that his client may succeed on the motions.

[ 32 ] With respect to the latter point, it might be that at some future date Atas may be awarded some of the relief that she sought, but did not pursue, on September 12, 2012. On the other hand, she may never renew either motion. More importantly, especially as regards the motion in Action No. 08-CV-364585, much of the relief sought and almost all of the grounds advanced will not be pursued by way of the motion, if and when it is renewed. It is thus apparent that, so far at least, Peoples has been put to significant expense to response to a broad brush attack on all of the proceedings to date, whereas the specific issue Atas seeks to litigate is ultimately very narrow.

[ 33 ] In my view, it would be unfair to permit Atas to force Peoples to incur substantial expense to respond to her motion, only to seek an adjournment on the basis that she is going to seek far narrower relief. It was Atas who decided to bring the motion and to frame it as broadly as she did. She cannot now complain that Peoples spent an inordinate amount of time when she, in effect, sought to re-litigate almost all of the issues in the case by way of this motion.

[ 34 ] Counsel for Peoples conceded that, assuming the motion is brought back on for argument, some of the time and expense incurred by her client may prove worthwhile. It is also apparent, however, that much of it was wasted effort, as was much of the time spent in court on September 12, 2012.

[ 35 ] A litigant who launches a motion and forces his or her opponent to respond and who then seeks to adjourn the very process initiated by him or her should not expect to be permitted to do so without facing cost consequences. Indeed, given the broad scope of the issues raised by Atas in her materials, it had to be within her reasonable expectation that Peoples would respond with detailed materials that it did.

[ 36 ] Many of the above comments apply in relation to the motion brought by Atas in Action No. 08-CV352871. Once again, Peoples was required to produce a detailed and thorough response in order to meet the motion. Considerable efforts and expense were expended. Atas must have expected this would occur. She opted not to proceed at this time. There were other avenues open to her. She cannot escape the cost consequences of her litigation choices.

[ 37 ] I am aware that the amounts sought by Peoples are significant. At the same time, I am aware that these expenses have been incurred by a mortgagee that has, on the face of the proceedings, acted appropriately to enforce its rights and pursue its remedies. So far at least, Atas has not succeeded in persuading the court that anything done by Peoples was improper. To that extent, Peoples has enjoyed complete success. Much of the efforts incurred by Peoples has proved unnecessary.

[ 38 ] In all of circumstances, I award costs to Peoples in relation to the motion in Action No. 08-CV364585 fixed at the all inclusive sum of $10,000 and in relation to the motion in Action No. 08-CV352871 at the all inclusive sum of $6,000. Both sum shall be payable within thirty days.

disposition

[ 39 ] The Atas motion in 08-CV364585 is therefore adjourned to be brought back at a date to be fixed by me. I am not prepared to fix a new date until I am satisfied that all revised motion materials have been exchanged. Then and only then will I entertain a request to set a date for the argument of the motion. Any argument that an urgent date is required will need to be supported by proper evidence.

[ 40 ] In relation to the motion in 08-CV-352871, that motion is adjourned at the request of the moving parties to a date to be fixed, subject to the qualification previously stated.

[ 41 ] Costs award as above.

[ 42 ] Finally, I note that in each of these motions the moving parties failed to file their materials properly with the Motions Court Office. Instead, having missed the filing deadline, they delivered the materials directly to me. As a consequence, none of the motion records was properly received and recorded as such by the Motions Office. Additionally, the moving parties have failed to pay the required filing fees. I direct that they take the necessary steps to remedy these omissions and to pay the requisite fees. They shall do so no later than the close of business on October 10, 2012.

Stinson J.

Date: September 25, 2012