BARRIE COURT FILE NO.: CV-15-0121

DATE: 20150730

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CONCENTRA FINANCIAL SERVICES ASSOCIATION

Plaintiff

– and –

NANCY JO LOWE and BRIAN JOHN LOWE

Defendants

Christopher J. Staples, for the Plaintiff

Nancy Jo Lowe, Self-Represented

HEARD: July 24, 2015

REASONS FOR DECISION

EDWARDS J.

Overview

[1] This is a motion for summary judgment by the Plaintiff against the Defendant Nancy Lowe (“Nancy”) on its claim on a mortgage dated June 24, 2009 between Nancy and her ex-husband Brian John Lowe (“Brian”). The Plaintiff obtained default judgment against Brian on July 11, 2014 in the amount of $200,930.11 together with costs in the amount of $1,308.05. The default judgment also ordered that Brian deliver to the Plaintiff possession of the lands that are the subject matter of this litigation.

[2] The mortgage at issue relates to municipal property known as 45 Campbell Avenue, Barrie, Ontario (“the property”). The mortgage period commenced July 1, 2009 for a period of five years and secured the principal sum of $216,540.50 with interest at 4.75 percent. The mortgage required monthly payments of $1,228.62. The balance of the principal and interest therefore became due and payable on July 1, 2014.

The Mortgage

[3] The mortgage went into default on February 2, 2014. The mortgage matured on July 1, 2014 and has not been renewed.

[4] On May 30, 2014 the Bank served on the Defendants a Notice of Sale. At that time the property was occupied by Brian, his daughter as well as a tenant. These individuals have vacated the property.

[5] When the mortgage went into default it is not contested that Nancy and Brian were in the midst of what would on all accounts appear to have been acrimonious family law litigation. This litigation ultimately resulted in a seven day trial that was heard before Graham J. commencing on June 26, 2014. The trial resulted in written reasons being released by Graham J. on October 20, 214. Without going into the details of the judgment itself it is fair to say that in order for Nancy to receive an equal share of the net family property, this was accomplished by vesting title of the matrimonial home and the property into her name as the sole owner. It is equally fair to note that the primary reason why Nancy finds herself in the position that she now does with the Plaintiff in this litigation is the failure of Brian to live up to his family law obligations by paying court ordered support and failing to ensure that any rental monies that were being generated from tenants of the property were used to pay down the monthly mortgage costs. Nancy is the unfortunate victim of a difficult matrimonial breakup. That said however, the fact still remains that the Plaintiff is owed what it is owed as a result of the default of not just Brian but also Nancy, both of whom support the mortgage in favour of the Plaintiff.

[6] Once the Notice of Sale was issued on May 30, 2014 it was the Plaintiff’s intention to sell the property under the Power of Sale provisions of the mortgage. The Plaintiff was therefore entitled to require vacant possession of the property. In furtherance of those rights the Plaintiff retained the services of a property manager, Veranova Properties Limited (“Veranova”) to secure the property and to act as the Plaintiff’s agent while in possession.

[7] When the property was secured by Veranova it is alleged by the Plaintiff that there were numerous issues that needed to be addressed with respect to the condition of the interior and exterior of the property. Included in those issues were problems with respect to mould which required air quality testing that was subsequently undertaken after Veranova had obtained two quotations. The air quality report obtained by Veranova recommends the removal of mould in various parts of the house.

[8] Nancy alleges that Veranova went about its responsibilities in a fashion that resulted in unnecessary destruction to the property and that the actions of Veranova, acting as the agent for the Plaintiff, has resulted in a diminution in the value of the property. These allegations are denied by the Plaintiff.

Nancy’s Position

[9] Nancy self-represented herself through these proceedings although she did comment that she has incurred $6,000 in legal fees. In argument she stated that she acknowledged that the Plaintiff was owed the money that it was owed under the mortgage but that the Plaintiff should not be entitled to any interest since the mortgage went into default because the Plaintiff could have received the rental income that the property was generating if the Plaintiff had not required the tenant to vacate the property. Nancy therefore suggests that the Plaintiff is only entitled to $195,000.

[10] As to the actions of Veranova, it is Nancy’s position that much of what Veranova did resulted in significant damage to the property and/or resulted in unnecessary work being conducted on the property. She uses as an example that the carpet that was removed, which, from her perspective, was relatively new (five years) and that prior to the tenant going into possession she had had the property cleaned and it was in good condition. This evidence is disputed by Veranova’s representative.

[11] As well, it is Nancy’s position that because of what Veranova has done, or for that matter not done, to the property there has been a significant diminution in value to the property. I have no evidence before me however with respect to what if any diminution in value there is to the property as a result of the alleged wrongdoing by Veranova.

Analysis

[12] There can be no dispute with respect to the principal amount that is owing to the Plaintiff. In its Statement of Claim, the Plaintiff claims payment of the sum of $199,760.11. This amount is comprised of the principal balance as of the date of default February 2, 2014 being $195,792.04. Interest is claimed to the date of the issuance of the Statement of Claim in the amount of $2,352.77 plus administrative charges, late payment charges, evaluation fee, other fees and property management charges for a total amount due and owing as May 26, 2014 being $199,760.11.

[13] I note from a review of the Plaintiff’s factum and supplementary factum that different principal balances are claimed together with interest. I am uncertain why the principal balance as of June 9, 2015 as set forth in the affidavit of Amy Casella is in the amount of $211,446.43 for which there has been an additional interest claim of $12,979.90. There would appear to be an element of double-counting in this regard.

[14] Using the amounts set forth in the Statement of Claim I am satisfied that there is no genuine issue with respect to the principal amount claimed of $199,760.11.

[15] I am equally not satisfied that there is any defence made out by Nancy in her affidavit evidence to the interest claims made in the Statement of Claim from the date when the Statement of Claim was issued to today’s date. The Plaintiff is entitled to interest at the rate of 4.75 percent on the amount claimed of $199,760.11. The per diem rate by my calculation works out to $25.996. By my calculation from the date of issuance of the Statement of Claim to the date of hearing of the motion there are 425 days resulting in interest owing of $11,048.38. I may be spoken to if my mathematical calculations are inaccurate.

[16] The Plaintiff is also claiming property management charges of $12,807.23 which includes the environment assessment account of Cambium Inc. in the amount of $2,028.35. This account was rendered in connection with the mould assessment that was necessitated as a result of the notice served on the parties by the City of Barrie. I am satisfied that there is no genuine issue with respect to this account and the Plaintiff shall have judgment accordingly.

[17] Therefore, the only area that is in dispute now is the remaining property management charges which after deduction of the Cambium account would total $10,779. There are factual issues that are in dispute between the Plaintiff and Nancy with respect to the reasonableness of these charges and, exercising the discretion that I have under Rule 20, I am directing that there shall be a mini-trial with respect to the reasonableness of these charges. That mini-trial will not be necessary in the event the Plaintiff decides not to proceed with that aspect of their claim. Given the amount at issue, each party shall have one hour to present their case.

[18] With respect to the counter-claim of Nancy, I am not satisfied that there is any basis for this court to exercise its discretion to stay the enforcement of this judgment. While the predicament that Nancy has found herself in is largely through no fault of hers, the fact still remains that the Plaintiff is entitled to payment on its judgment and has been and continues to be entitled to have vacant possession of the property.

[19] If Nancy believes that there has been any diminution in the value of the property as a result of any inappropriate action on the part of the Plaintiff, Nancy is entitled to proceed with her counterclaim, but it will not in any way alter the fact that the Plaintiff is entitled to proceed with its remedies to sell the property. If Nancy requires access to the property prior to its sale to assist her with respect to obtaining evidence concerning the state of the property as it presently exists, the Plaintiff is to provide Nancy access to the property for that purpose upon reasonable notice prior to the actual sale to a third party purchaser for value.

[20] In summary, the Plaintiff shall have judgment against Nancy on the principal amount claimed in the Statement of Claim in the amount of $199,760.11 together with accrued interest from that date to July 24, 2015 in the amount of $11,048.38 together with the invoice from Canbium in the amount of $2,028. The judgment shall accrue at the rate of 4.75 percent until paid.

[21] As to the issue of costs, the Plaintiff’s counsel submitted a Bill of Costs to the court which on a partial indemnity basis at his hourly rate of $300 per hour would generate costs of approximately $15,000 plus disbursements of approximately $500. I entertained submissions from both sides with respect to costs. While the Plaintiff is entitled to costs on a substantial indemnity basis pursuant to the provisions of the mortgage, I am satisfied that the hourly rate charged by Plaintiff’s counsel on a partial indemnity basis is an appropriate means of fixing costs in this matter. I note that there were a number of adjournments prior to the hearing of the summary judgment motion, some of which may very well have been necessitated as a result of requests for adjournment made by Nancy.

[22] In fixing costs, this court must fix costs that must be seen to be reasonable from the perspective of the losing party. See Boucher v. Public Accountants Council of Province of Ontario, 2004 14579 (ON CA). Nancy indicated in her costs submissions that she had incurred costs with respect to presumably assisting her in this matter which as of today’s date total approximately $6,000. She also sought her own personal costs in relation to the time that she has expended on this matter were she to have been successful. She suggested a reasonable figure of $12,000.

[23] Under the circumstances if Nancy felt that $12,000 was a reasonable figure were she to have been successful it seems to me that she could reasonably have anticipated paying costs to the Plaintiff in a similar amount. I am therefore exercising my discretion by fixing costs in this matter of $12,000 plus the assessable disbursements claimed.

[24] If there are any mathematical calculations that need to be addressed with respect to the calculation of the interest and the principal amount, I may be spoken to.

Mr. Justice M.K. Edwards

Released: July 30, 2015