CITATION: BFT CAPITAL INC. v. WINDECKER THREE CORPORATION, 2013 ONSC 3140
COURT FILE NO.: 12-32797
DATE: 2013-05-29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BFT CAPITAL INC.
Plaintiff (Defendant to the Counterclaim)
- and -
WINDECKER THREE CORPORATION, LENARIS CORPORATION and ABBA UNO CORPORATION
Defendants (Plaintiffs by Counterclaim)
COUNSEL:
C. Argiropoulos, for the Plaintiff (Defendant to the Counterclaim)
G. Augier, Director of the Corporate Defendants (Plaintiffs by Counterclaim)
HEARD: February 26, 2013
RULING
PARAYESKI, J.
[1] The plaintiff seeks summary judgment as against the defendants in respect of a loan by the former to the latter, which loan was secured by a mortgage. The mortgage was registered against property in Hamilton and, as collateral security, against two pieces of property located in Cayuga.
[2] The defendants defaulted in the making of a regular payment under the mortgage on December 15th, 2011. The statement of claim was issued in respect of that default on January 26th, 2012. Notices of sale (one relative to the Hamilton property and another relative to the Cayuga properties) were issued on January 30th, 2012. The defendants delivered their statement of defence and counterclaim on February 25th, 2012. The thrust of that pleading is that while the defendants did not dispute the payment default, they say that the plaintiff dissuaded a potential donor from making a gift which would have allowed the mortgage to be paid off in full. The defendant Abba Uno Corporation operates as some kind of church or religious body.
[3] A further default occurred on March 24th, 2012 when the defendants allowed the fire insurance policy on the Hamilton property to expire and not be replaced. On a "without prejudice" basis, the plaintiff agreed to discharge its mortgage on one of the Cayuga properties when it was paid $116,500 on March 29th, 2012. Of that sum, $4,000 was taken as costs, and the remaining $112,500 was applied so as to reduce the balance of the mortgage. The monthly payment due on the mortgage was reduced to reflect the application of the $112,500 referred to above.
[4] The defendants defaulted in making the reduced payment on May 15th, 2012. On June 11th, 2012, the then-solicitor for the plaintiff wrote to the defendants demanding payment and stating that "no further notice will be given to you before we proceed with legal action and take possession of the...properties."
[5] The defendants do not appear to dispute that there is default in respect of mortgage payments and fire insurance. They do say, however, that the acceptance of the payment in March of 2012 and the resetting of the monthly payment amount show that, in effect, if not also literally, the mortgage was brought into good standing, and that, as a result, the plaintiff must begin the collection process all over again. In addition of course, the defendants argue that their counterclaim is an answer to the claim and that a trial is required to test its merits.
[6] I shall deal with the second argument first. I reject it because the defendants have failed to lead direct evidence of the allegedly foregone donation. Second-hand evidence from people who say that they have spoken with the potential donor is not good enough in this context. Conspicuously absent is an affidavit from that potential donor stating his ability and intention to give and that his decision not to give came as a result of misrepresentation by the plaintiff. While there could be said to be authority in obiter in the decision of Wilson, J.A.in Botiuk v. Collinson et al., 1979 CanLII 2060 (ON CA), 26 O.R. (2d) 580 for the proposition that the original notices of sale may have been rendered ineffective because of the payment acceptance and monthly payment change noted above, the underlying action itself is not rendered a nullity especially in the face of further default. That ruling, moreover, has been considered and distinguished in the Ontario Court of Appeal decision in Kateri v. Sugarman, [2003] O.J. 1195. In Kateri, the Ontario Court of Appeal approved of the making of a distinction "between a case where the parties have...remade the agreement and a case where there has been payment on account". In the latter instance, the mortgagee is not required to issue a new notice of sale before proceeding with its sale.
[7] As to the first argued point set out above, the payment of the sale proceeds from one of the collateral properties in Cayuga was accepted on a "without prejudice" basis, and the monthly payments on the underlying mortgage were adjusted accordingly. There is no evidence before me that the mortgagors sought calcification of what precisely was meant by the payment having been accepted "without prejudice". I interpret it to mean that there was simply a payment on account, albeit with a change in the monthly payment. I am not prepared to accept the mortgagor's argument that the agreement was "remade" based upon the facts before me. This is not supported by the evidence.
[8] I also reject a further unpleaded argument by the defendants to the effect that the underlying action is somehow barred by operation of s. 42(1) of the Mortgage's Act. When I read that section in conjunction with the ruling of Howden, J. in Adelaide Capital Corp. v. J. and B. Resources Co., 1994 O.J. 1771, I come to the view that s. 42(1) only precludes a mortgagee from taking a fresh step in an action during the currency of the period referred to in a notice of sale. Here the statement of claim was issued on January 26th, 2012. The notices of sale are dated January 30th, 2012 and gave the mortgagees until March 10th, 2012 to make payment. The statement of claim was thus issued outside of the currency of the notices, i.e. before the period referred to in the notices commenced to run. The evidence before me is that the only step that was taken during the period of January 30th, 2012 to March 10th, 2012 in the action was for the defendants to deliver their statement of defence and counterclaim. Plainly, that step was not taken by the plaintiff. Accordingly, I see no merit in the defendant's argument on this issue.
[9] I am satisfied that there remains no substantive issue which requires a trial in order to be determined. Accordingly, the granting of summary judgment is appropriate. The plaintiff is entitled to the relief it seeks at paragraphs 1 and 2 of its notice of motion.
[10] If the parties are unable to agree with respect to costs of the motion before me, they may make brief written submissions in that regard. Each set of submissions, if any, shall be no more than three typewritten pages in length, not including an outline of costs. The plaintiff is to submit its submissions on costs on or before July 1st, 2013. The defendants shall have a further 15 days thereafter to make their cost submissions. Those submissions should be sent to my attention at the John Sopinka Court House in Hamilton.
PARAYESKI, J.
Released: May 29, 2013
CITATION: BFT CAPITAL INC. v. WINDECKER THREE CORPORATION, 2013 ONSC 3140
COURT FILE NO.: 12-32797
DATE: 2013-05-29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BFT CAPITAL INC
Plaintiff (Defendant to the Counterclaim)
- and –
WINDECKER THREE CORPORATION, LENARIS CORPORATION and ABBA UNO CORPORATION
Defendants (Plaintiffs by Counterclaim)
RULING
PARAYESKI, J.
Released: May 29, 2013