SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-12-469516
DATE: 20140402
RE: Alfonso Izzo and Elvira Izzo, Plaintiffs
– AND –
Edin Trobradovic, Defendants
BEFORE: Justice E.M. Morgan
COUNSEL:
G. Gryguc, for the Plaintiffs
D. Saverino, for the Defendants
HEARD: May 2, 2014
ENDORSEMENT
[1]
Overview
The Plaintiffs, who are Chargees/Mortgagees under a Charge registered in the Land Titles Office for the Land Titles Division of the Regional Municipality of Peel (No. 43) as Instrument No. PR2039992 on February 17, 2012 in which the Chargor is the Defendant, move for judgment for the outstanding balance owing under the Mortgage.
2Judgment has already been granted in favor of the Plaintiffs on the mortgage, and the mortgaged property has been sold and various creditors have been paid. The only issue is the outstanding amount owing to the Plaintiffs.
[3]
Procedural History
The matter first came before me on January 24, 2014. At that time, Mr. Gryguc appeared for the Plaintiffs and Ms. D. Bloom appeared for the Defendant. I was advised that Ms. Bloom was new on the file, but that the matter had essentially settled. Mr. Gryguc explained that the final amounts owing had yet to be calculated as there were some outstanding construction liens that needed to be discharged and that awaited a final determination by the Construction Lien Master.
4My endorsement of January 24, 2014 reads as follows:
Mr. Gryguc advises that the matter has settled but for a final calculation of the precise amount owing, which will turn on the formal order from the Construction Lien Master being finalized.
Motion adjourned on consent to February 12, 2014 for 5 minutes before me.
5It is clear from that endorsement that whatever dispute had existed between the parties up until that time had been resolved, and that once the amount of the liens was finally determined by the Construction Lien Master the amount of the outstanding mortgage debt would be known and could be inserted into the judgment. The parties were expecting nothing controversial to be left after the Master’s discharge of the liens, and so booked a 5 minute appointment so that they could simply have the final judgment signed at Motions court.
6Ms. Gryguc and Ms. Bloom appeared before me on February 12, 2014, as scheduled, but the final figures were still not available. The endorsement on that date reads:
Parties are still working out the calculation for the final settlement.
Motion adjourned on consent to March 4, 2014 for 5 minutes before me.
7The most recent affidavit filed by Enio Zeppieri, on behalf of the Plaintiffs, updates the mortgage calculations to April 21, 2014. In that statement, the four construction liens are accounted for, together with a number of other expenses that have been paid out of the proceeds of sale of the property. The April 21st statement makes it clear that the four construction liens that were still under adjudication when the parties appeared before me on January 24th were paid out on February 14, 2014. That, of course, explains why the calculations were still at issue and the matter had to be further adjourned on February 12, 2014.
8Mr. Gryguc and Ms. Bloom appeared before me again on March 4th, as scheduled, but on that date advised me that the matter had to adjourn due to some unforeseen personal circumstances of the Defendant that were not related to the mortgage issue. I adjourned the matter to April 22, 2014.
9When the matter came up on April 22, 2014, Mr. Gryguc appeared again for the Plaintiffs but the Defendant had retained Mr. D. Saverino as new counsel. Mr. Saverino requested an adjournment given that he had just been retained and had not yet had a chance to review the full file. My endorsement of that date reads as follows:
Mr. Saverino has just been retained and requires a short adjournment in order to be properly instructed by his client. This matter has been lingering for a long time and needs to be brought to a close. I will grant a short adjournment given Mr. Saverino’s situation, but will expect the parties to be ready to proceed at the next appearance. I will remain seized of the matter.
Adjourned to May 2, 2014 for 5 minutes before me.
10Given that, once again, the matter was set down for only 5 minutes, the expectation was that once Mr. Saverino had an opportunity to familiarize himself with the file a judgment could simply be taken out on the final outstanding amount.
[11]
Analysis
Mr. Gryguc and Mr. Saverino have appeared today. Mr. Saverino submits, much to Mr. Gryguc’s surprise, that his client disputes the mortgage figures. Mr. Saverino has not filed any materials to indicate what the Defendant’s position is, except that he says that the Plaintiffs have not provided sufficient backup documentation to allow the Defendant to verify the amount that they are claiming. To this, Mr. Saverino adds that the record itself shows some contradictory calculations by the Plaintiffs, who have asserted that different amounts are owing at different times during the course of these proceedings.
12Mr. Gryguc points out that the statement provided on April 21, 2014 gives a detailed accounting of the outstanding balance. It also sets out with precision the amounts of the construction liens discharged on February 14, 2014, which were supposed to be the last amounts to be accounted for in an otherwise agreed-upon judgment.
13The April 21, 2014 statement shows an initial mortgage amount of $1,162,000.00 on August 12, 2012, the date that the mortgage was transferred to the Defendant. It tallies up the amounts paid and received, including the construction liens, and comes up with a final outstanding balance of $870,278.26.
14Mr. Gryguc explains that indeed Mr. Saverino is correct, in that during the course of 2013 various materials were filed by the Plaintiffs showing a different starting point for the mortgage loan. He goes on to explain, however, that following the cross-examinations in this matter the parties verified $1,162,000.00 as the starting point on August 12, 2012. He submits that had already been resolved between the parties as of the January 24, 2014 appearance, which is why he indicated at the time that the final numbers turned on the then-pending determinations by the Construction Lien Master and nothing more.
15I note that my January 24th endorsement indicates that I was advised of this agreement by Mr. Gryguc at the time, and that Ms. Bloom was silent on the question of the settlement. As indicated above, this was because Ms. Bloom was new to the file and was not in a position to speak about it with sufficient knowledge. It has now been pointed out to me that while Ms. Bloom herself was new to the file on January 24th, having been sent by her principals to speak to the adjournment, her law firm had been on record for many months and was familiar with the entire proceeding.
16In any case, Ms. Bloom made two further appearances before me, one in February and another in March, and never raised any issue with respect to anything that Mr. Gryguc advised me of during their first appearance on January 24th. For the Defendant to now come with newly appointed counsel and take the position that the Defendant objects to the numbers presented by the Plaintiffs is very troubling.
17I do not blame Mr. Saverino, as he is indeed new to the file and is simply trying to make sense of what everyone – including Mr. Gryguc – admits were a confused set of mortgage calculations at the outset of these proceedings. However, for the Defendant at this late date to express a substantive objection to the figures on which the parties had supposedly already agreed, makes me wonder what has been going on with the Defendant during the various appearances – or behind the scenes of those appearances – up until now.
18It appears to me that the Defendant’s previous law firm, who were on record for many months and were familiar with the state of affairs in this matter, sent a lawyer who was unfamiliar with the file on January 24th. In that way, Mr. Gryguc was compelled to advise me of the settlement without having an opposing counsel present who could verify it on the spot. The Defendant’s lawyers then went for several more months and several more appearances without mentioning that their client had any objection to my January 24th endorsement, which had made it clear that the outstanding calculations turned on the outcome of proceedings before the Construction Lien Master. Then, in a last minute gambit, the Defendant has changed lawyers and instructed Mr. Saverino to object to all of the Plaintiff’s calculations.
19Mr. Saverino has not presented me with any figures that the Defendant says are correct. The Defendant has no alternative calculation of his own that he says represents the correct outstanding balance on the mortgage debt. Rather, the Defendant’s position is that he simply is not satisfied with the Plaintiff’s figures. This includes the construction lien amounts, which Mr. Saverino says have not been verified by the Plaintiffs with any backup documentation, as well as a number of other features of the Plaintiffs’ latest account.
20In particular, Mr. Saverino takes issue with the fact that the starting figure for the mortgage loan on August 13, 2012 is different from what it was previously said to be by the Plaintiffs.
21With all due respect, the construction liens are a matter of public record in proceedings in which the Defendant himself was a party. The Plaintiffs have provided a sworn affidavit with their April 21, 2014 statement that sets out the amount of the four liens. The liens were registered against the Defendant’s own property and their precise amounts were determined by the Master in a court proceeding. The Defendant clearly has notice of the amounts of the liens. To say that the Plaintiffs have failed to provide him with the backup documentation to support the figures that they cite in their April 21st statement sounds more like a delay tactic than a substantive objection.
22As for the discrepancies between the mortgage starting point on the latest statement and those on previous statements provided by the Plaintiffs, Mr. Gryguc points out that the discrepancy is in the Defendant’s own favor. As he explains it, the Plaintiffs, following the cross-examinations, have taken into account the objections made by the Defendant to their previous calculations and have adjusted the figure downward.
23Accordingly, while Mr. Saverino is correct that the figure has changed over time, his objection does not persuade me that the Plaintiffs’ current figure is incorrect. If anything, his pointing out of these discrepancies was, in effect, an invitation for Mr. Gryguc to give the more fulsome explanation of how the current figure was arrived at. I now understand that the Plaintiffs appear to have been quite careful in the way that they have come up with their calculations. It is no doubt for this reason that by January 24th the Defendant had agreed to everything but the construction lien figures that were then still to be determined.
[24]
Conflict of Interest
As a final matter, Mr. Saverino points out that the Defendant has some concern about a potential conflict of interest with Mr. Gryguc’s law firm, Zeppieri & Associates. He points out that on February 13, 2012, the Defendant signed an Authorization and Direction stating that he had retained Zeppierri & Associates to represent him in respect of this mortgage. He further states that some of the confusion here is due to the fact that the advance of mortgage funds was apparently taken by that firm into its trust account on his behalf, and that he still does not have a proper accounting of the amount that they received.
25Mr. Gryguc indicates that this arrangement with his law firm lasted only a couple of days. He states that when it became clear who the mortgage lender would be, Zeppierri & Associates arranged for a new solicitor to represent the Defendant so that they could represent the Plaintiffs as lender. Throughout the course of the mortgage and the proceedings leading up to today, Zeppierri & Associates has represented the Plaintiffs as lender, and not the Defendant as borrower.
26I note that the Defendant has never complained about this on any previous occasion. None of his previous counsel have brought it up, and even now the Defendant has not moved to remove Zeppierri & Associates from the record. Mr. Saverino simply points this out as yet one more ground on which he urges me to conclude that the precise outstanding mortgage debt cannot be determined at this point.
27As indicated above, the mortgage debt has been adjusted downward by the Plaintiffs and their counsel, not upward. The conflict with Zeppierri & Associates does not appear at this point to be a substantive one, and has not impacted in any significant way on the proceedings or on the calculation of the debt. In my view, the initial jostling of lawyers, which appears to have been agreeable to the Defendant, is a red herring and should not play any role in arriving at a judgment at this stage.
[28]
Disposition
The Plaintiffs shall have judgment in the amount of $876,797.55. This judgment shall carry post-judgment interest at the rate of 11% in accordance with the terms of the mortgage.
29Costs of today’s appearance to the Plaintiffs in the amount of $1,500.
Morgan J.
Date: May 2, 2014