ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-3694-00
DATE: 20131007
BETWEEN:
RANDOLPH CHONG and DONNA DADD
Applicants
– and –
HARCHRAN KAUR
Respondent
Mark A. Klaiman, for the Applicants
Roy D’Mello, for the Respondent
HEARD: June 12, 2013
REASONS FOR JUDGMENT
Tzimas J.
[1] This is a trial arising out of an application to determine what monies are owed by the Applicants, Randolph Chong and Donna Dadd, (Dadd and Chong), as mortgagors, to the Respondent, Harcharan Kaur, (Kaur) as mortgagee.
[2] By the time of the trial, Kaur was seeking judgment in the sum of $95,695.63. At the time of the application, Kaur’s Discharge Statement identified an outstanding debt of $84,448.28.
[3] Dadd and Chong never denied that they owed certain monies to Kaur. Their submission is that their debt does not exceed $48,000.00. They dispute the balance of almost $47,000.00 claimed by Kaur on account of almost $25,000.00 in legal fees, as well as additional accrued interest, mortgage renewal fees, lender administrative charges, and additional NSF fees.
[4] The only issue before this court is to determine whether the various charges, other than those admitted by Dadd and Chong, which amount to almost as much as the actual mortgage, are monies that are duly owed to Kaur under the mortgage terms.
BACKGROUND
[5] Dadd and Chong obtained a loan of $42,000.00 from Kaur on June 24, 2011. They secured the loan with a mortgage against the home that they owned located at 6239 Salt Marsh Court, in Mississauga, Ontario.
[6] The essential terms of the mortgage were: a) principal of $42,000.00; b) monthly interest payments in the sum of $525.00; c) interest at the rate of 15% per annum; and d) a last payment date of July 1, 2012. Dadd and Chong were also required to deliver post-dated cheques to Kaur for one year, up to and including July 1, 2012.
[7] Dadd and Chong were able to meet their monthly obligations for the first eight months of the mortgage. However, they encountered some serious difficulties. In December 2011, Dadd was diagnosed with breast cancer and required immediate aggressive treatment. In January 2012, Chong lost his job. Dadd admitted that neither she nor her husband advised Kaur of their personal difficulties. Dadd explained that she was so overwhelmed by her cancer diagnosis and her treatments that all her attention was focused on her health.
[8] Despite their personal situations, Dadd and Chong did their best to maintain their mortgage payments until March 2012. Unfortunately, they were unable to meet their loan obligations for the last four months of the agreement, namely, from April 2012 to the end of the mortgage term, in July.
[9] In response to the default, Kaur acted immediately and commenced an action against Dadd and Chong on May 14, 2012. On May 24, she also issued a Notice of Sale. Kaur obtained default judgment on June 12, 2012 for the total sum of $52,352.64. The judgment included legal costs and disbursements.
[10] On July 6, 2012, Kaur served Dadd and Chong with a notice demanding possession, giving them a deadline of July 16 to vacate their home.
[11] In the meantime, Dadd and Chong worked on obtaining alternate financing to remedy their default. By early August 2012, they did just that. Their counsel requested an updated Discharge Statement. They were surprised to receive an updated claim seeking a “Mortgage Payment Balance” of $78,209.68, almost $30,000.00 more than what they estimated their debt to be and almost double the principal.
[12] The parties were unable to resolve the difference between what Dadd and Chong believed they owed and what Kaur claimed.
[13] On August 23, 2012, Kaur proceeded with the eviction of Dadd and Chong from their home. In response, and in an attempt to prevent the eviction, Dadd and Chong were obliged to commence an application to have the mortgage discharged. The application was dismissed because of some deficiencies in the evidence concerning the debt reconciliation. However, the dismissal was without prejudice to Dadd’s and Chong’s ability to renew their request for relief, based on further and better evidence. The net result of the dismissal was the eviction of Dadd and Chong from their home.
[14] Dadd and Chong renewed their application on August 31, 2012. Their counsel attended in court and proposed two possible approaches to the Application. One was to have the undisputed sum of $47,000.00 paid immediately to Kaur and the disputed sum into court. The other was to pay the whole sum of $84,000.00 into court. On either scenario, the disputed sum would be set down for trial and the mortgage would be discharged immediately.
[15] Counsel for Kaur was unable to be in court on August 31, 2012. However, with Dadd and Kaur living outside of their home in temporary accommodations, it was urgent that the Application be heard as soon as possible.
[16] Without any particular explanation by the court as to the merits of paying into court either the full or the partial sum of the alleged debt, the court ordered that the full sum of $84,000.00 be paid into court. In exchange, the Court also ordered that the mortgage be discharged and that the issue of Kaur’s entitlement to the disputed sums be set down for trial.
[17] A further complication surfaced soon after the order of August 31, 2012 was issued. Counsel for Dadd and Chong discovered what was described as a “slip” or a typographical error in the wording of paragraph 4 of the Order. This was significant because as written, the order appeared to mischaracterize the parameters of the issues to be tried. In the context of the disagreement between the parties, the error was obvious and the parties should have been able to resolve the matter without further argument.
[18] Instead, Kaur contested the request for the correction. In essence, she tried to take advantage of the error so as to convert the claim into something that it could never be.
[19] On February 7, 2013, the court granted the motion and corrected the August 31st Order such that:
“THIS COURT ORDERS that there be a trial of issues as between Applicants and Respondents to determine what monies the Respondent is due under the terms of the mortgage granted by the Applicants to the Respondents.”
See Dadd and Chong v. Kaur, 2013 ONSC 1004, para. 33.
[20] On that motion, the court noted Kaur’s complaint that she had yet to see a penny from her loan and that she was suffering prejudice. In response to that complaint the court ordered that Kaur be permitted to withdraw from the court the uncontested sum of $47,000.00 without having to bring a further motion for the payout of the funds.
[21] Rather surprisingly, by the time this trial commenced, Kaur had still not acted on the order that permitted her to withdraw the $47,000.00. But she continued to complain rather angrily, that she had still not received a single payment and that her situation was outrageous. She described the offer for the partial payment of August 2012 as “ridiculous”. Her indignation however was disproportionate with her apparent failure to take up the opportunities both in September 2012 and in March 2013 to receive a very substantial partial payment against her alleged claim.
[22] At the conclusion of this trial this court renewed the order that Kaur be permitted to withdraw from the court the uncontested sum of $47,000.00.
ANALYSIS
[23] In light of the admitted debt of $47,000.00, the analysis that follows concerns itself with the balance of the charges that are claimed by Kaur.
[24] At trial, Kaur claimed the following sums:
Judgment:
52,352.64
Accrued interest from the dated of judgment to June 12/13
7,420.95
Legal Fees
24,637.50
Disbursements
3,364.00
HST
3,452.87
Less fees and disbursements set out in Statement of Claim
4,836.47
Amount admitted by borrower but not included – NSF charges
900.00
Amount admitted by borrower but not included – Statement Fee
500.00
Amount admitted by borrower – discharge fees
525.00
Additional disbursements (PCHS Nov. 14/13 invoice)
339.14
Lender administration charge
4,640.00
Renewal Fee
2,100.00
Additional NSF/Non-payment fee – Sept. 1/12
300.00
TOTAL:
95,695.63
[25] In Kaur’s Statement of Claim, of May 14, 2012, Dadd and Chong’s debt was broken down as follows:
Principal as of March 1, 2012
42,000.00
Interest to May 24, 2012
1,277.24
NSF/Non-payment charges
600.00
Lender administration charges
960.00
Three months interest penalty
1,575.00
Legal fees & disbursements
2,892.20
Total:
49,304.44
[26] On May 24, 2012, the Discharge Statement broke down the debt as follows:
Principal as of March 1, 2012
42,000.00
Interest to May 24, 2012
1,449.84
NSF/Non-payment charges
600.00
Lender administration charges
1,360.00
Three months interest penalty
1,575.00
Legal fees & disbursements
4,114.90
Total:
51,099.74
[27] Dadd and Chong stated at trial that the following charges were not being contested:
Principal
42,000.00
Interest up to Aug.16, 2012
3,036.94
Interest from August 17 to September 7, 2012
700.56
Appraisal
350.00
PCHS
652.91
- 339.14
Discharge of Mortgage
525.00
Disbursements, ($1,363.30, broken down as follows):
Title search
150.00
Execution Search
56.00
Faxes
79.00
Registered Letter
65.00
Serving Statement of Claim
100.00
Issue Statement of Claim
181.00
Judgment
55.00
Motion to Issue Writ of Possession
127.00
Issue Writ of Possession
55.00
Fee to Enforce Writ
349.00
Tax Certificate
75.00
Registration of Discharge
71.30
TOTAL:
48,967.85
[28] In addition to the breakdown of these figures, counsel for Dadd and Chong noted that additional fees, not already claimed by Kaur might be appropriate in the range of $6-7,000.00 for a total outstanding debt of $56,000.00.
[29] Dadd and Chong always conceded that they defaulted on their loan and that they owed the principal as well as certain reasonable expenses. They also did not defend the statement of claim that resulted in default judgment in the sum of $52,352.64. Nor did they seek to set aside or appeal the default judgment in that sum. In light of that, at the very minimum, they owe Kaur $52,352.64.
[30] Based on the Statement of Claim, the Discharge Statement of May 24 and the submissions in Court concerning the various figures, the sum of $52,352.64 contains the following charges:
Principal as of March 1, 2012
42,000.00
Interest to May 24, 2012
1,449.84
NSF/Non-payment charges
600.00
Lender administration charges
1,360.00
Three months interest penalty
1,575.00
Legal fees & disbursements
Additional legal fees & disbursements
4,114.90
1,252.90
Total:
52,352.64
[31] That leaves the following charges in dispute:
A. Accrued Interest from June 12, 2012 of $7,420.00
B. Additional Legal Fees after June 12, 2012 of $24,637.00
C. Disbursements of $3,364.00
D. HST of $3,452.87
E. NSF Charges of $900.00
F. Statement Fee of $500.00
G. Discharge Fee of $525.00
H. Additional Disbursements (PCHS Nov.14/13 invoice)
I. Lender Administration Charges, $4,640.00
J. Renewal Fee, $2,100.00
K. Additional NSF / Non-payment fee – Sept. 1, 2012, $300.00
Each of these charges is reviewed below.
(Analysis paragraphs 32–65 continue exactly as in the source text.)
Tzimas J.
Released: October 7, 2013
COURT FILE NO.: CV-12-3694-00
DATE: 20131007
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RANDOLPH CHONG and DONNA DADD
and
HARCHRAN KAUR
REASONS FOR JUDGMENT
Tzimas J.
Released: October 7, 2013