ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-109149
DATE: 20121123 CORRIGENDA: 20121129
BETWEEN:
Vladislav Moskalev Plaintiff – and – Mark Lathem, Litigation Administrator for The Estate of Oleg Fraev and The Toronto-Dominion Bank Defendants
Harvey Mandel, appeared as counsel for the Plaintiff on October 24, 2012 only
Andrea J. Sanche, appeared as counsel for the Plaintiff on November 22, 2012 only
Jason R. Cherniak, for the Defendant Mark Lathem, litigation administrator for The Estate of Oleg Fraev
David Taub and Barbara Green, for Snowview Bancorp Inc.
HEARD: November 22, 2012
REVISED REASONS FOR DECISION
The text of the original ruling has been corrected with the text of corrigendum (released today’s date)
EDWARDS j.
[ 1 ] The plaintiff in this matter seeks an order setting aside two certificates of pending litigation registered against title of property known as 59 Anglewood Court, Vaughan, ON (the “Property”). If the certificates of pending litigation are vacated, the plaintiff will then be in a position to complete a pending sale of the Property. I was advised by counsel that the sale of the Property is scheduled to close on November 26, 2012. There is therefore urgency to the release of my decision in this matter. These Reasons are, as I indicated to counsel, preliminary in nature and more fulsome Reasons will be provided.
[ 2 ] The plaintiff in this matter obtained a certificate of pending litigation on the basis of affidavit evidence that it is conceded by counsel for the plaintiff was, at best, misleading and, at worst, false.
[ 3 ] The relevant facts are as follows: Oleg Fraev (“Fraev”) purchased the Property on June 30, 2011. The plaintiff alleges that he contributed $560,000.00 towards the purchase price of the Property. Very shortly after the purchase of the Property, on July 6, 2011, Fraev died.
[ 4 ] The purchase of the Property was secured in part, by way of a mortgage with the Toronto-Dominion Bank (“TD Bank”). Not surprisingly, given the death of Fraev, the TD Bank did not receive any mortgage payments. In due course, the TD Bank served a notice of sale under mortgage. The notice was purportedly served on Fraev at the address for the property. Given that Fraev had died, he could not have received notice, nor did any other potential members of his family. The TD Bank was never advised that Fraev had died.
[ 5 ] It is suggested in argument that the plaintiff went into possession of the Property in September or October 2011 and began to misappropriate Fraev’s mail. When the plaintiff was cross-examined on the affidavit evidence before this court, he acknowledged that he went into possession of the Property sometime prior to the end of 2011.
[ 6 ] The plaintiff became aware as of December 2011 that there had been a missed payment on the TD Bank mortgage. It is noteworthy that the plaintiff attended Fraev’s funeral and as such there can be absolutely no doubt that the plaintiff was well aware of Fraev’s death and at no time advised the TD Bank of his death.
[ 7 ] On February 16, 2012, the plaintiff registered a caution on title to the Property. The plaintiff had retained Myer Betel to act as his lawyer in that regard. In the plaintiff’s cross-examination, he acknowledged that he advised Mr. Betel of Fraev’s death sometime in January or February 2012.
[ 8 ] On March 21, 2012, the TD Bank served a notice of sale on Fraev at the Property. On April 16, 2012, the plaintiff’s solicitor requested a payout statement and assignment of the mortgage from the TD Bank. Plaintiff’s counsel also requested an assignment of the notice of sale under mortgage. The TD Bank responded that it would not provide the plaintiff with a statement of arrears or assignment of the mortgage or notice. The TD Bank further advised that “Until there has been a judicial determination as whether your client has an actual interest in the Property, your client’s right to redeem has not crystallized…”.
[ 9 ] On May 4, 2012, the plaintiff obtained an Order from McIsaac J. based on an affidavit of Valentin Opolinski, which granted declaratory relief to the plaintiff entitling him to “redeem the mortgage registered in the Land Titles Division of York Region on June 30, 2011…”.
[ 10 ] It is conceded by counsel for the plaintiff that without the order of McIsaac J., the plaintiff would not be in the position that he is today (i.e., the right to sell the Property pursuant to the notice of sale delivered by the TD Bank).
[ 11 ] The plaintiff previously obtained a certificate of pending litigation on an ex parte motion heard by Boswell J. on April 25, 2012. The affidavit evidence before Boswell J. comprised an affidavit of Valentin Opolinski. Mr. Opolinski is described in the affidavit as the attorney for the plaintiff. The affidavit is based on information and belief from the plaintiff. The affidavit filed, in support of the motion, for the certificate of pending litigation as well as the affidavit filed, in support of the relief sought, before McIsaac J. were both clearly misleading and false in material respects. The court was not advised, on either occasion, that Fraev had died. In fact, to the contrary, both affidavits would have left the reader with the clear impression that Fraev was alive. The affidavit evidence before Boswell J. and McIsaac J. was misleading and false. Neither of the affidavits filed before either Justice was prepared by counsel appearing in the motion before me. The plaintiff should not be entitled to benefit from such falsehood.
[ 12 ] The pending sale of the Property shall therefore only proceed if the plaintiff pays into court an amount of money that will effectively top up the difference between the sale price of the Property and the appraised value of the Property. For the purposes of these Reasons only, I am establishing the fair market value of the Property at $1,700,000.00. The amount that the plaintiff shall pay into court as a condition to an order setting aside the certificate of pending litigation shall be:
$1,700,000.00 less reasonable real estate commission fees less reasonable legal fees for the sale of Property, less the amount paid to the TD Bank to discharge the TD Bank mortgage.
The plaintiff in making the payment into court shall be entitled to use any equity resulting from the sale of the Property.
[ 13 ] If the plaintiff fails to pay into court the amount of money contemplated by paragraph [12] above, then the certificates of pending litigation shall not be vacated. In the event the plaintiff fails to make the payment into court with the result that the certificates of pending litigation are not vacated and the sale of the Property does not proceed, this court will then invite further submissions from the parties with respect to the possibility of a court appointed receiver.
[ 14 ] As to the question of costs, I will invite further submission from the parties to be filed with the trial co-ordinator’s office within two weeks from the date of receipt of these Reasons, which submissions are limited to five pages in length.
Justice M.L. Edwards
Released: November 29, 2012
CORRIGENDA
Page 1, style of cause – Added “appeared as counsel on October 14, 2012” after Harvey Mandel.
Page 1, style of cause – Added “appeared as counsel on November 22, 2012” after Andrea J. Sanche.
Page 3, paragraph 11 - Added “Neither of the affidavits filed before either Justice was prepared by counsel appearing in the motion before me.”