SUPERIOR COURT OF JUSTICE - ONTARIO

DATE: 20150825

B E T W E E N:

GORDETTE JEAN G. GALLION
Plaintiff

-AND-

ONTARIO MORTGAGE CORPORATION
Defendants

BEFORE: F.L. Myers J.

READ: August 25, 2015

endorsement

[1] By endorsement dated July 27, 2015, reported at 2015 ONSC 4770, the court directed the registrar to send a notice to the plaintiff in Form 2.1A informing her that the court was considering dismissing her action under Rule 2.1 for being frivolous, vexatious, or an abuse of process on its face. The registrar sent the notice as required. The plaintiff responded with written submissions dated August 4, 2015.

[2] The plaintiff sues Ontario Mortgage Corporation for wrongly evicting her from her condominium unit in July of 1980. The plaintiff pleads that there were no arrears when the mortgagee enforced the mortgage. The plaintiff says that she urgently wants her property back.

[3] In the prior endorsement, the court indicated that because the subject matter of the proceeding is an eviction and mortgage enforcement that occurred 35 years ago, the limitation period seems to have expired long ago. The court also noted that if the condominium unit was sold by the mortgagee 35 years ago, then the mortgagee has no ability to return it to the plaintiff in any event.

[4] In her submissions, the respondent continues to invoke divine assistance. She also argues that there is no limitation period on theft. She notes that the court has but a fraction of her story. Therefore, she included with her brief submissions her thick original real estate file for the court’s review and return to her.

[5] While a plaintiff’s submissions under Rule 2.1 are limited to ten pages, it struck me as appropriate to review the plaintiff’s documents to try to assist her in understanding the legalese in which the real estate transactional documents are written.

[6] It is apparent that by agreement of purchase and sale dated October 23, 1976, the plaintiff and her sister agreed to buy the subject condominium unit from Margaret Kehkla for $36,500. The purchase price was to consist of $3,400 to be paid in cash on closing, assumption by the buyers of an existing first mortgage of $20,400, and a new second mortgage to be taken back by Ms Kehkla in the amount of $12,450.

[7] The purchase closed on November 26, 1976 as agreed. The title register shows that the pre-existing first mortgage was registered in the name of Housing Corporation Limited. The plaintiff says that this is the defendant Ontario Housing Corporation.

[8] The title register and documents enclosed by the plaintiff also show that on the date of the closing of the sale, the plaintiff and her sister granted the former owner, Ms Kehkla, a second mortgage as agreed. Ms Kehkla transferred the second mortgage to Harry and Anna Zahoruk that day. The plaintiff and her sister therefore owed $12,400 plus accruing interest to Mr. and Mrs. Zahoruk.

[9] By deed dated June 12, 1978, the plaintiff’s sister transferred her interest in the condominium to the plaintiff.

[10] The plaintiff’s documents include a cheque to Mr. Zahoruk dated May 2, 1980 that may have been dishonoured by her bank. She has disclosed bank statements and copies of cheques evidencing many payments that she made to Ontario Housing Corporation from 1976 until 1980.

[11] The plaintiff’s documents include a mortgage statement delivered by Ontario Mortgage Corporation as at December 31, 1980. It shows that the plaintiff’s payments to the first mortgagee dated the first day of January, February, March, April and May, 1980 and a replacement payment dated May 8, 1980 were all returned by her bank. No subsequent payments were made by the plaintiff.

[12] The plaintiff’s documents also include a Notice of Sale by Power of Sale that was delivered to her by the second mortgagees, Mr. and Mrs. Zahoruk, dated October 14, 1980. The Notice of Sale told the plaintiff that the Zahoruks claimed that the full second mortgage vendor take-back loan was due with interest and costs. It gave her until December 4, 1980 to pay $14,450.98 to the Zahoruks to redeem the mortgage failing which the mortgagees would sell the condominium unit.

[13] Mortgagees are allowed to sell mortgaged premises if they give proper notices and follow the statutory requirements. The plaintiff received the Notice of Sale and did not take any legal steps to contest the sale at the time.

[14] The plaintiff’s documents also contain copies of registered mail receipts and the appropriate statutory declarations as were required by the registrar of titles to establish that the second mortgagees had properly exercised their power of sale.

[15] By deed dated May 26, 1981, the mortgagees sold the condominium to their son Dennis Zahoruk. The supporting Land Transfer Tax affidavit says that he paid $36,000 consisting of cash on closing of $16,400 and assumption of the outstanding first mortgage of $19,600.

[16] There fact that the buyer was the son of the second mortgagee vendors is suspicious. I cannot tell if $36,000 was the fair market value of the unit in 1981 or if the cash component was actually paid by the buyer. Moreover, I cannot tell if there was sufficient cash paid on closing to leave anything left for the plaintiff after the payment of the principal and interest due to the Zahoruks plus all costs incurred by them in the sale process. There was also an execution registered against the condominium unit by the Law Society of Upper Canada prior to the sale. If there were excess funds available after payment in full of the second mortgage, they would first have been payable to the Law Society before the plaintiff would have been entitled to receive anything in any event.

[17] For better or for worse, the plaintiff has also provided the court with a copy of an opinion letter that she obtained from a lawyer in January, 2014. The lawyer recites a 2005 court case in which the plaintiff claimed that the sale of her condominium unit was a fraud. She was unsuccessful in that proceeding. Counsel has opined that the plaintiff has not established the requirements to prove that the sale was unlawful. Counsel also opined that under the Real Property Limitations Act, R.S.O. 1990, c L.15, the ten year limitation period applicable to any lawsuit has long since expired. Counsel concluded that further litigation will not result in the outcome that the plaintiff wishes to achieve (being possession of the condominium unit and substantial damages); rather, “[t]he probable outcome of further litigation in the matter is a dismissal of the claim and an order for costs against you.”

[18] Counsel is correct. There are several reasons why this lawsuit cannot continue:

a. The defendant Ontario Mortgage Corporation did not have anything to do with the sale of the condominium unit. The second mortgagees Harry and Anna Zahoruk sold the condominium unit under a power of sale process. The buyer took over the plaintiff’s liability for paying the first mortgage and eventually seems to have paid it off in connection with a refinancing many years later;

b. The facts in issue arose some 35 years ago. There is a limitation period that prevents lawsuits on mortgages from being commenced more than 10 years after the events arose. The plaintiff’s argument that there is no limitation period for “theft” refers to criminal charges. This is not a criminal case. This is a civil case in which the plaintiff asks the court to give her possession of the condominium unit. Limitation periods do apply to prevent lawsuits of this type.

c. The plaintiff has already tried to litigate the subject matter of this action. Continuing to bring new litigation on matters that have already been resolved is vexatious and an abuse of process.

d. As surmised in my prior endorsement, the title registrar shows that there have been many subsequent transfers of the condominium unit. A lawsuit against a former mortgagee will do nothing to entitle the plaintiff to possession of the unit decades later from innocent third party purchasers.

[19] The plaintiff notes in her submissions that she leaves judgment of those who inflicted evil upon her to the ultimate judge. The plaintiff always remains at liberty to seek the assistance of a higher court.

[20] The plaintiff’s action cannot succeed. It is frivolous and vexatious on its face no less so when the court reviews the plaintiff’s documents to try to assist. Moreover, the case is of the type to which the attenuated process of Rule 2.1 ought to apply applicable. Raji v. Borden Ladner Gervais LLP, 2015 ONSC 801 at para. 9.

[21] The action is therefore dismissed without costs.

[22] I dispense with any requirement for the plaintiff’s approval of the formal dismissal order as to form or content.

[23] I direct the registrar to provide a copy of this endorsement to the parties by mail and email (to those whose email addresses it has) and to serve the formal order on the plaintiff in accordance with rule 2.1.01(5). I also direct the registrar to make a copy of the plaintiff’s file to keep in the court file and to return the plaintiff’s original documents to her by regular mail

________________________________ F.L. Myers J.

Date: August 25, 2015