ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: CV-14-511096
Date: 2015-09-25

BETWEEN:

BENEDEK ZSOLT
Plaintiff

– and –

STANLEY JOHN PODSADECKI
Defendant

Peter D. Woloshyn, for the Plaintiff

Stanley John Podsadecki, on his own behalf

Heard: September 23, 2015

M. D. FAIETA, j

reasons FOR DECISION

[1] The defendant brings this motion to set aside the sale of his partially-built cottage under the Mortgages Act as well as to set aside the default judgment that was issued on October 15, 2014. For the reasons that follow I have dismissed his motion without costs.

[2] The facts related to this motion are fairly described in paragraphs 2-25 of the plaintiff’s Factum. The defendant did not dispute the statement of facts. I adopt those facts.

[3] The defendant purchased a property in 2012. The purchase was financed by a mortgage in the amount of $119,000.00. After acquiring the property the defendant commenced building a cottage which has not yet been completed.

[4] The defendant defaulted on the mortgage in September 2013. The plaintiff commenced Power of Sale proceedings against the defendant on January 21, 2014, by way of Notice of Sale. It required full payment by March 7, 2014. This Notice was sent by registered mail to the defendant by plaintiff’s counsel. It was not returned. Payment was not received.

[5] The plaintiff commenced this action on August 27, 2014 seeking an order for possession, leave to file a writ of possession, and payment of $125,607.20 being what is owed under the mortgage. This claim was personally served on the defendant on September 11, 2014. Default judgment in the amount of $129,473.55 plus $1,050.00 in costs was granted on October 15, 2014.

[6] On November 26, 2014 the plaintiff obtained a Writ of Possession. The plaintiff obtained Delivery of Vacant Possession of the property on December 15, 2014 at 12:30 p.m. These documents and the Default Judgment were sent to the defendant by the plaintiff’s counsel via Expresspost by letter dated December 17, 2014. The letter advised that the plaintiff would be selling the property to satisfy the mortgage debt. On January 14, 2015 counsel for the defendant advised that he was arranging a new first mortgage and asked for a mortgage statement of discharge purposes. By letter dated January 14, 2015, the plaintiff’s counsel provided a mortgage statement to the defendant along with a copy of the Judgment.

[7] The property was listed for sale in March 2015 and was sold by the plaintiff for $250,000.00 on May 25, 2015. The sale closed on June 12, 2015. The sale was an arms-length transaction.

ISSUE #1: SHOULD THE SALE BE SET ASIDE?

[8] The defendant states that he was not aware of the Power of Sale proceedings until June 2015. He states that he gave all correspondence to his son, Michael Podsadecki. The defendant accepts that he is responsible for the default of the mortgage and wishes to pay it. He also submits that the property should have sold for more than $250,000.00.

[9] The statutory right of redemption is provided by section 22 of the Mortgages Act, R.S.O. chap. M.40. The right to redemption expires when the plaintiff entered into an agreement to sell the property. See Lusinde v. New Haven Mortgage Income Fund (1) Inc. and Pires, 2014 ONSC 2250, para. 11. In any event, the defendant has given evidence on cross-examination that he could not afford to pay what is owed under the mortgage.

[10] Further, I am not satisfied that the sale was improvident. The size of the cottage is 9,000 square feet. At the time of sale it was partially completed. The plaintiff obtained three appraisals ($200,000-$250,000; $310,000; $249,000). Counsel for the plaintiff sent these appraisals to the defendant by letter dated March 11, 2015. The defendant believes that he passed the envelope containing the letter unopened to his son Michael. The property was listed for $349,000 on March 15, 2015. A copy of that listing was sent by plaintiff’s counsel to the defendant by letter dated April 1, 2015. A receipt of delivery was provided by Canada Post. Again the defendant forwarded the envelope containing the letter unopened to his son Michael

[11] Between March 16, 2015 and May 25, 2015 the property was listed for sale. The property was shown by five agents to six or seven prospective purchasers. The listing price was reduced to $299,000 on April 27, 2015. On May 25, 2015 the property was sold for $250,000.00.

[12] The defendant submits that the property was sold for far less than its market value. However, it provided no affidavit evidence from an appraiser in support of that position. I accept the unchallenged evidence of Tamas Harsanyi, an experienced real estate agent, that the property received all reasonable and proper exposure to the market and that in the circumstances the best price available was obtained for it. Mr. Harsanyi was the listing agent. He noted that he received a large number of inquiries; however, these inquiries did not lead to showings as the potential purchasers, and real estate agents mentioned that the cottage, at over 9,000 square feet, was far too large and expensive to make it feasible for them to purchase and complete.

[13] In all of the circumstances there is no legal basis to set aside the sale of the property.

ISSUE #2: SHOULD THE DEFAULT JUDGMENT BE SET ASIDE?

[14] The Court has the authority to set aside a default judgment under Rule 19.08 of the Rules of Civil Procedure.

[15] As noted earlier, the defendant was personally served with the Statement of Claim on September 11, 2014. He has not explained why he did not file a Statement of Defence. Further, he has not offered any plausible defence. To the contrary, he admits that he defaulted on the mortgage.

[16] In my view, there is no legal basis to set aside the default Judgment issued on October 15, 2014.

CONCLUSIONS

[17] The defendant’s motion is dismissed. The plaintiff did not file an outline of costs and did not press the point. No costs are awarded.

Mr. Justice M. D. Faieta

Released: September 25, 2015

COURT FILE NO.: CV-14-511096
DATE: 20150925

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

BENEDEK ZSOLT
Plaintiff

– and –

STANLEY JOHN PODSADECKI
Defendant

REASONS FOR DECISION

Mr. Justice M. D. Faieta

Released: September 25, 2015