ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 11-1028

DATE: 2014/07/04

BETWEEN:

ALFRED EDWARD GORDON
Plaintiff

– and –

DAVID SINCLAIR JOYNT, MICHAEL P. REID, MARK LEE, IVAN HODGINS and ROYAL LEPAGE PAULINE AUNGER REAL ESTATE
Defendants

Clinton H. Culic, for the Plaintiff

Donald F. Morris, for the Defendant David Sinclair Joynt

HEARD: May 30, 2014 at Brockville

REASONS FOR JUDGMENT

Kane J.

[1] The defendant mortgagee Joynt brings this motion for summary judgment pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for a Writ of Possession of the home and adjoining farm lands owned by the plaintiff Gordon and his spouse Angelina Pauline Gordon [”Mrs. Gordon”] as joint tenants [the “Property”].

[2] The remaining heads of relief requested in the motion are adjourned on consent.

[3] The other defendants consent to Mr. Joynt’s request for a Writ of Possession.

[4] Mr. Gordon opposes the possession sought by the mortgagee. He submits that it would be inequitable and unjust to force him out of his home where he claims damages that exceed the amount due under this second mortgage. Mr. Gordon accordingly requests this motion be dismissed due to his equitable claim of set off or alternatively that this judge assume case management of this action as recommended by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7.

[5] During argument, the court provided counsel with several trial dates for this anticipated five to seven day trial.

BACKGROUND FACTS

[6] Mr. and Mrs. Gordon bought this farm property of approximately 100 acres, including an older farmhouse on June 4, 2009 from Mr. Joynt for $180,000. As part of the purchase price, Mr. Joynt took back from the purchasers a second mortgage in the amount of $54,000. The term of the mortgage is one year. It matured on June 4, 2010. The second mortgage bears interest at the rate of 5% per annum and required monthly interest payments in the amount of $225 commencing July 4, 2009.

[7] Mr. and Mrs. Gordon separated in March, 2010. The last payment made on the second mortgage was in April, 2010. Using 5% annual interest, the current balance of principal and interest under this mortgage to the end of June, 2014 is some $65,700.

[8] Mr. and Mrs. Gordon obtained a final order in family proceedings from Trousdale J. dated August 16, 2012 pursuant to which it is ordered that:

(a) Mr. Gordon is entitled to purchase the ownership interest of Mrs. Gordon in the Property within the earlier of 60 days of this action by Mr. Gordon against these defendants being determined or September 30, 2013, failing which the Property should be listed for sale.

(b) Neither party shall encumber the Property.

(c) If the Property is listed and sold rather than Mr. Gordon purchasing his wife’s interest therein, the proceeds of sale, after payment of the first mortgage and this mortgage debt if owing and after repayment of $24,000 to Mr. Gordon’s father for the purchase of a furnace, are to be divided between the husband and wife.

[9] On the evidence, Mr. Gordon has not purchased his wife’s interest in the Property. The Property has not been listed for sale pursuant to the above final order. There is no evidence that either Gordon has returned before Trousdale J. for relief in relation to this final order. This court presumes Mr. Gordon wants his claims herein determined to assist he and his wife financially to deal with this second mortgage and raise the capital needed for him to buy her interest in the property.

[10] The Gordons viewed the Property in early February, 2009 prior to signing the agreement of purchase and sale. It was winter and the land was covered with snow. The purchase agreement:

(a) is conditional upon the inspection of the subject property by qualified home inspector and the purchasers obtaining a report satisfactory to them;

(b) contains a direction to the vendor requiring Mr. Joynt to terminate the tenancy with a third-party in a small apartment within the Property and provided they can give possession on closing to the purchasers,

(c) states the vendor agrees to have the existing wood-burning stove inspected by a WETT certified technician, that the stove is in good working order, meets prevailing code regulations and to provide written proof thereof.

[11] Mr. Joynt’s insurer provided a signed Solid Fuel Heating Questionnaire prior to closing which states that the subject wood-burning furnace is three years old, that the installation had been inspected by someone who is WETT certified, that the unit is certified under the Canadian Standards Association and that the furnace unit is EPA rated and WETT certified.

[12] The purchasers prior to closing waived the condition permitting them to an inspection by a qualified home inspector.

[13] The Gordons inspected the Property in May, 2009 prior to closing. Upon attending their solicitor to sign documents at the time of closing, the Gordons asked to see the furnace WETT. They were advised that such a certificate had been produced by the vendor but was not currently available for their inspection. The Gordons’ purchase of the Property closed on June 4, 2009 and saw the above signed questionnaire after closing.

[14] Mr. Gordon in September, 2009 obtained a WETT Inspection Report dated October 19, 2009 regarding the subject furnace. The report:

(a) states the age of furnace as “old” with a “poor” shell condition;

(b) states that the shell condition, the height above roofline, the breach pipe, and the fuel pipe clearance, support and joints are not code compliant;

(c) states the furnace cannot pursuant to code requirements be installed in its current location;

(d) recommends the furnace be removed and replaced with another heating source; and

(e) recommends that the chimney be rebuilt with qualified sweep flue tiles.

[15] This court does not have evidence as to when the code requirements referred to in this report came into effect and whether they are retroactive.

[16] In his affidavit, Mr. Gordon states that it was cheaper to install a wood furnace outside the home rather than to fix the existing inside installation which he did at a cost of $24,000 borrowed from his father.

[17] Mr. Gordon did not on this motion produce documentary evidence as to the cost of replacing this furnace which would be available from the manufacturer/installer. He produced a document signed by himself and his father, Alfred D. Gordon, which states this son and daughter-in-law in November, 2009 borrowed $24,000 for an outside furnace from Mr. Gordon Sr., which loan bears interest at 8%.

[18] Mrs. Gordon does not dispute these above facts and she was not cross-examined thereon when she testified on this motion.

[19] Mr. Gordon complains that a portion of the driveway on the Property is contaminated by oil. No explanation is presented why these oil spills were not noted during the Gordons’ May 2009 pre-closing inspection of the Property.

[20] Mr. Gordon on this motion presented an estimate from a trucking company from July, 2011 in the amount of $21,750, including tax, for soil sampling, testing, excavation and disposal of contaminated soil. There is no evidence of the soil being tested, found contaminated or being removed since then.

[21] Mr. Gordon states that in the fall of 2013, he found buried oil filters, oil cans, grease cans and rubber tires along a fence on the Property. Mrs. Gordon in her affidavit confirms the presence of such debris. There is no evidence as to the quantity thereof. Mr. Gordon estimates that the removal cost of this debris and the above contaminated soil will be approximately $40,000. No evidence is filed in support of that estimate.

[22] Mr. Reid, acting for the purchasers in the late fall of 2009, spoke to the vendor’s solicitor about the Gordons’ complaints regarding the furnace and the oil spill. Mr. Reid advised the Gordons to itemize their complaints in writing together with an estimate of costs to repair the same which the vendor’s solicitor advised would be responded to by an offer from Mr. Joynt. Mr. Gordon refused to provide the documentation so requested, as confirmed by Mrs. Gordon.

[23] In Court File No. 11-0827, Mr. Joynt commenced legal proceedings against Mr. and Mrs. Gordon and served a motion therein returnable September 13, 2011 seeking a Writ of Possession of the Property. That motion was withdrawn by Mr. Joynt on September 16, 2011.

[24] The action herein was commenced solely by Mr. Gordon on October 14, 2011. Mrs. Gordon is not a party to the action or the counter or cross claim therein filed by Mr. Joynt.

[25] The claim against Mr. Joynt is for damages for concealment, misrepresentation and breach of contract as well as an injunction to stay enforcement of this second mortgage. The further claims against the other defendants are for damages.

[26] The respondent to a motion for summary judgment is required to present their strongest argument in response to the request for summary judgment. Mr. Gordon has failed to do so in relation to his equitable claim of set off regarding the alleged contaminated soil and debris on the property. It appears there is no testing done or removal of soil since 2011. Beyond a few photographs of debris, there is no evidence as the quantity thereof or the cost, if any, for disposal thereof. Mr. Gordon would not be the first person to load debris into a truck and drive it to a local dump.

[27] Mr. Gordon was aware to his complaint regarding the furnace, the soil contaminated land and the debris in the fall of 2009. He refused to articulate his claim in relation thereto until he commenced this action 2011 and has not proceeded to examinations for discovery in his action during the last three years. Pursuant to the final order of Trousdale J., the Gordons have failed to list the Property for sale by September, 2013 or return before that judge.

[28] Litigation costs in this and the family action may be an issue for the Gordons.

[29] Mr. Gordon is avoiding payment on the second mortgage now overdue for four years, avoided his wife’s court terms to realize her interest in the Property and not pressed this action on to trial. While not disputing his default under the second mortgage, Mr. Gordon through delay is temporally defeating the mortgagee’s remedies under this mortgage.

[30] The central issue remains whether Mr. Gordon’s opposition and evidence has defeated the mortgagor’s onus to demonstrate that there is no issue as to possession requiring a trial.

[31] Mr. Gordon has failed to demonstrate that a trial is required regarding his damage claim for alleged soil contamination and debris on the Property so as to defeat this motion for possession.

[32] Mr. Gordon has presented sufficient evidence to demonstrate a strong claim in relation to the furnace. Furnace purchases are seldom high on a younger couple’s list of optional purchases following the purchase of their first home. Despite the absence of a motion by the plaintiff for summary judgment, this court would have been inclined to grant Mr. Gordon partial judgment in relation to the furnace claim, together with interest, but is prevented in doing so due to the agreement to limit this motion to the relief stated and the resulting absence today of the other defendants.

[33] Mr. Gordon does not propose his payment into court to offset the time, cost and risk associated to his claim proceeding and thereby offset the further delay to the remedies of the mortgagee.

[34] This is a classic action demonstrating the need for proportionality under Rule 1.04(1.1) and addressed by the Supreme Court in Hryniak, supra. The Gordons’ disputes with these defendants, and with each other, based on his 2011 annual income of $46,600, likely exceed their financial capacity to pursue absolutely. The defendants likely are and have adopted the opposite position.

[35] This court relies upon its authority as confirmed in King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215 and Mishev v. Shah, 2011 ONSC 1672.

[36] Mr. Gordon will have until November 1, 2014 to secure, by loan or mortgage, $30,000 ($54,000 minus $24,000) and pay that amount to Mr. Joynt as partial principal re-payment against this second mortgage. Upon payment thereof, this present mortgage to Mr. Joynt shall remain registered on title. Should Mr. Gordon secure such $30,000 by mortgage loan and register a new second mortgage, this mortgage to Mr. Joynt shall be lowered to and become a third mortgage against the Property, thereby permitting priority registration of a new second mortgage. That will require the participation of Mrs. Gordon who is not before this court. The rights of Mr. Joynt as mortgagee will upon payment to him of $30,000, thereupon be frozen and not exercisable until the trial decision in this action.

[37] Failing the above $30,000 payment to Mr. Joynt by November 1, 2014, that mortgagee shall be entitled to exclusive possession and a Writ of Possession of the Property for the intended purpose of sale. Upon such power of sale occurring, Mr. Joynt shall from the sale proceeds he receives as mortgagee, pay $24,000, plus 8% per annum thereon from December 1, 2009 to the date of his payment into court which shall remain in court until the trial decision in this action.

[38] Should the Gordons agree and sell the Property in the interim, $30,000 of the Joynt mortgage and interest on that portion shall be paid into court until the trial decision in this action in consideration for which Mr. Joynt shall deliver a discharge of this mortgager upon the sale of the Property by the Gordons.

[39] This court makes the following ancillary orders:

(1) Discoveries of all parties in this action to be completed by October 15, 2014.

(2) Argument of motions in relation to examinations for discovery and undertakings to be completed by December 20, 2014.

(3) The trial of this action, scheduled for five to seven days, shall commence on February 9, 2015.

(4) As an alternative to 3 above, if the Gordons agree to limit their claims against the defendants in this action to the furnace replacement, Mr. Gordon may bring a motion for summary judgment as to that remaining issue no later than October 15, 2014 before this judge.

COSTS

As success was divided, there shall be no costs order.

Kane J.

Released: July 4, 2014

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ALFRED EDWARD GORDON

Plaintiff

– and –

DAVID SINCLAIR JOYNT, MICHAEL P. REID, MARK LEE, IVAN HODGINS and ROYAL LEPAGE PAULINE AUNGER REAL ESTATE

Defendants

REASONS FOR JUDGMENT

Kane J.

Released: July 4, 2014