SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 09-CV-388989

MOTION HEARD: November 20, 2012

Between: Greta Rosen in her capacity as estate trustee for the estate of the late Dina Muller

Plaintiff

v.

Eugene Jacob Muller and Rochelle Muller, also known as Rochel Muller, also known as Rochelle Rabinowitz

Defendants

BEFORE: Master Thomas Hawkins

APPEARANCES:

Orie H. Niedzviecki for moving defendant Rochelle Rabinowitz

Fax: (416) 368-2982

Joel E. Levitt for responding plaintiff

Fax: (416) 323-9355

No one for defendant Eugene Jacob Muller

REASONS FOR DECISION

[1] This is a motion by the defendant Rochelle Rabinowitz for security for costs brought pursuant to clauses 56.01(1)(a),(d) and (e) of the Rules of Civil Procedure.

[2] These clauses of subrule 56.01(1) provide as follows.

56.01 (1) The court, on motion by the defendant or respondent in a proceeding, may make such order for security for costs as is just where it appears that,

(a) the plaintiff or applicant is ordinarily resident outside Ontario;

(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;

(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient asset in Ontario to pay the costs of the defendant or respondent ….

[3] Greta Rosen is the daughter and executrix of the estate of the late Dina Muller. She is also the sister of the defendant Eugene Jacob Muller. He was married to the defendant Rochelle Rabinowitz. They separated in 1999 and subsequently divorced.

[4] The sole asset of the estate of the late Dina Muller is a mortgage in the face amount of $100,000. In this action the estate seeks to recover from the defendants as mortgagors the amount allegedly due under that mortgage, namely the sum of $99,850.

[5] The moving defendant Rochelle Rabinowitz seeks security for costs on three grounds. First she says that the plaintiff Greta Rosen is ordinarily resident out of Ontario, namely in the State of Israel.

[6] The plaintiff Greta Rosen resides most of the time in the City of Tel Aviv, Israel. She also resides some of the time in the City of Toronto where she has an apartment.

[7] One may have more than one residence at the same time. On the evidence before me, Greta Rosen resides in both Toronto and Tel Aviv. However, since she resides most of the time in Tel Aviv, I conclude that Greta Rosen ordinarily resides out of Ontario.

[8] The executor of an estate cannot be ordered personally to post security for costs. See Shaher v Rashid Estate, 2011 ONSC 3679 per McEwen J. at paragraph 24. I therefore decline to order security for costs under clause 56.01(1)(a) on the ground that Greta Rosen is ordinarily resident out of Ontario.

[9] Next, the moving defendant Rochelle Rabinowitz moves for security for costs under subrule 56.01(1)(d) and submits that as an executrix, Greta Rosen is a nominal plaintiff, and that there is good reason to believe that she has insufficient assets in Ontario to pay the costs of the moving defendant Rochelle Rabinowitz.

[10] I agree that the executor of an estate who, like Greta Rosen, is not a beneficiary of the estate, is a nominal plaintiff. See Henry Estate v. Henry, 2012 MBQB 267 per Burnett J. at paragraph 33 and Shaher v. Rashid Estate, 2011 ONSC 3679 per McEwen J. at paragraph 24. However, since Greta Rosen is an executrix, she personally cannot be ordered to post security for costs on the ground that she is a nominal plaintiff, even if she has no personal assets in Ontario.

[11] The estate can be ordered to post security for costs in an appropriate situation. See Shaher v. Rashid Estate, supra, at paragraph 24.

[12] The only asset of the estate is an alleged mortgage on a property in the City of Vaughan, Ontario which, as I have said, the defendants gave to Dina Muller.

[13] In her affidavit supporting her motion the moving defendant Rochelle Rabinowitz says that her position is that this mortgage is a sham and that no funds were ever advanced under it. She does not say that she knows from personal experience that no funds were ever advanced under this mortgage, or that someone with personal knowledge of the events surrounding this mortgage has informed her and that she believes that no funds were ever advanced under this mortgage.

[14] A statement that a litigant takes a particular position on an issue in an action is not evidence that the facts underlying that position are true.

[15] The affidavit which Rochelle Rabinowitz swore in support of this motion is the only affidavit sworn in support of this motion. That being so, there is no evidence before me that the subject mortgage is a sham.

[16] The evidence of Greta Rosen is primarily that her mother advanced the $100,000 as a loan secured by the subject mortgage. That said, at one point in her examination for discovery she appears to have accepted defence counsel’s suggestion that the $100,000 was advanced not by Dina Rosen but by Tranby Holdings Limited. Tranby Holdings Limited was a corporation owned by Dina Muller and her husband Samuel Muller, Greta Rosen’s father. Greta Rosen never waivered from her evidence that $100,000 was loaned against the security of the subject mortgage.

[17] On the basis of the evidence before me, I reject the defence argument that the subject mortgage is a sham. That leads me to the conclusion that the estate of Dina Muller has an asset in Ontario, namely the subject mortgage. I therefore decline to order the estate of Dina Muller post security for costs on the basis of subrule 56.01(1)(d).

[18] The third basis on which the defendant Rochelle Rabinowitz seeks security for costs is subrule 56.01(1)(e).

[19] Defence counsel submits that this action is frivolous and vexatious because the governing limitation period had expired when this action was commenced on October 14, 2009. If this position is correct then the estate of Dina Rosen does not have an asset in Ontario because the subject mortgage is unenforceable.

[20] By its terms the subject mortgage became due and payable on October 11, 1995, over 14 years before this action was commenced.

[21] The governing limitation period is found in subsection 23(1) of the Real Property Limitations act, R.S.O. 1990 c.L. 15. That subsection provides as follows.

No action shall be brought to recover out of any land or rent any sum of money secured by any mortgage or lien, or otherwise charge upon or payable out of the land or rent, or to recover any legacy, whether it is or is not charged upon land, but within ten years next after a present right to receive it accrued to some person capable of giving a discharge for, or release of it, unless in the meantime some part of the principal money or some interest thereon has been paid, or some acknowledgment in writing of the right thereto signed by the person by whom it is payable, or the person’s agent, has been given to the person entitled thereto or that person’s agent, and in such case no action shall be brought but within ten years after the payment or acknowledgment, or the last of the payments or acknowledgements if more than one, was made or given.

[22] This action is one to recover a sum of money secured by a mortgage within the meaning of subsection 23(1). The limitation period in subsection 23(1) is 10 years after a present right to receive the secured money accrued to some person capable of giving a discharge for or release of the subject mortgage.

[23] Defence counsel submits that in the present case the limitation period expired on October 10, 2005 or 10 years from the date the subject mortgage became due and payable. If defence counsel is correct in this submission, the present action is statute barred with the result that this action is frivolous and vexatious and the estate of Dina Muller should be ordered to post security for the costs of the moving defendant Rochelle Rabinowitz.

[24] In response plaintiff’s counsel points to the evidence of Greta Rosen that on February 10, 2003 the defendant Eugene Muller (one of the two mortgagors) made a payment of $150 towards the principal owing under the subject mortgage. (The payment must be a payment of part of the principal owing because under the terms of the mortgage no interest is payable prior to the date of maturity of the subject mortgage.) Pursuant to a power of attorney which her mother Dina Muller (the mortgagee) had given Greta Rosen, Greta Rosen issued a receipt for this payment by Eugene Muller.

[25] In this statement of defence in this action Eugene Muller admits that he made the February 10, 2003 payment in question. I regard this plea as an admission because if it were untrue, the action against him would be statute barred.

[26] Plaintiff’s counsel submits that under subsection 23(1) of the Real Property Limitations Act, where there has been a payment of some part of the principal owing under a mortgage, the limitation period does not expire until 10 years after the most recent payment of principal was made. He submits that this action is not statute barred (and thus not a frivolous and vexatious action) because it was commenced less than 10 years after February 10, 2003. I agree.

[27] I therefore conclude that this action is not frivolous and vexatious, that the estate does have an asset in Ontario, namely the subject mortgage, and that in these circumstances I should not order the estate of Dina Muller to post security for the costs of the moving defendant Rochelle Rabinowitz under subrule 56.01(1)(e).

[28] For all these reasons this motion is dismissed.

[29] The plaintiff Greta Rosen has been successful on this motion and is entitled to the costs of it. I fix those costs at $1,139.44 and order the defendant Rochelle Rabinowitz to pay such costs to the plaintiff Greta Rosen within 30 days.

_(original signed) __

Master Thomas Hawkins

DATE: March 8, 2013