SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Peter Paraskevopoulos and Pan Scorpion Limited, plaintiffs, responding
AND: Pezzack Financial Services Inc., defendant, moving party
BEFORE: Mr Justice Ramsay
COUNSEL: Mr Dennis Covello for plaintiffs; Mr Evan L. Tingley for defendant
HEARD: November 20, 2015 at St Catharines
ENDORSEMENT
1The defendant moves for summary judgment on the counterclaim.
2On August 24, 2013 the individual plaintiff, Mr Paraskevopoulos, who is the principal of the corporate plaintiff, met Robert Pezzack, the principal of the defendant, to negotiate a loan. Paraskevopoulos’s acquaintance, Nick Kallimanis, was in default on a mortgage he had given to the defendant on property in Ridgeway. The defendant agreed to assign the mortgage to the plaintiff, taking Kallimanis off the hook, in exchange for $165,600.95, to be paid within 12 months. Paraskevopoulos and Kallimanis were going to split the rents coming in on the property in order to repay Paraskevopoulos. As security for the price of the assignment, the plaintiffs gave the defendant a mortgage on a property in Niagara Falls. At the end of the meeting, Pezzack reduced the agreement to handwriting, which Paraskevopoulos signed. Paraskevopoulos went to his lawyer, who registered the assignment of mortgage.
3On November 1, 2014 the plaintiffs stopped paying on the Niagara Falls mortgage. As of November 1, 2015 the balance owing was $177,758.94. On March 4, 2015 the defendant issued a notice of sale on the Niagara Falls property. On March 15, 2015 the plaintiffs sued for an order declaring the Niagara Falls mortgage void, and for other relief. The defendants counterclaimed for judgment on the mortgage.
4The plaintiffs say that there are issues that require a trial.
5The plaintiff Paraskevopoulos deposes that at the August 24, 2013 meeting he told Pezzack that he could not read English and that he wanted a gentlemen’s agreement and no problems or encumbrances with the title on the Ridgeway property. He deposes that Pezzack told him that the Kallimanis mortgage was in first place and that there were no problems. There were problems, and the agreement does not represent what he agreed to. Kallimanis deposes to similar effect.
6Pezzack deposes that he made no representations apart from what was reduced to writing. The writing does not mention other encumbrances or their priority. Pezzack says that Paraskevopoulos read over the agreement before signing it.
7If Paraskevopoulos could not read English on August 24, 2013, he has since learned, because the jurat in his affidavit of October 20, 2015 does not include the certification referred to in Rule 4.06(8), and no reputable commissioner would commission the affidavit without that certification if Paraskevopoulos appeared not to understand the language used in the affidavit, which was English.
8The extract of title for the Ridgeway property shows the following encumbrances:
June 18, 2010
Charge in favour of defendant
August 5, 2010
Lien in favour of Legal Aid Ontario
December 4, 2013
Defendant’s charge transferred to corporate plaintiff
March 27, 2014
$20,438 certificate of tax arrears to Town of Fort Erie
July 30, 2014
$86,248 lien in favour of H.M. in right of Canada, Minister of National Revenue
January 29, 2015
$32,586 line in favour of H.M. in right of Canada, Minister of National Revenue
9The lien in favour of Legal Aid Ontario was filed after the original charge. The plaintiff was assigned what the defendant had. It therefore has priority over Legal Aid Ontario. There is no “problem or encumbrance” caused by the Legal Aid lien.
10The tax liens to Her Majesty are also subordinate because they were filed subsequently: Excise Act, RSC 1985, c. E-15, s.316 (5). Even if Pezzack made the representations claimed, knowing that a tax judgment had been obtained before the agreement, no “problem or encumbrance” resulted for the plaintiffs. There is a basis in the evidence for the suggestion that a tax judgment had been obtained by August 24, 2013 and that Pezzack knew so, but even if it is one of the judgments that were subsequently filed, it was filed too late to affect the plaintiffs’ interest.
11The Town’s lien takes priority over the plaintiff’s lien, even though it was filed later: Municipal Act, 2001, SO 2001, c. 25, ss. 373-375, 381. There is nothing in the evidence before me, however, to suggest that Mr Pezzack knew on August 24, 2013 that Kallimanis had or would default on his taxes. Presumably the plaintiffs’ lawyer would do a tax search before filing the mortgage transfer. He certainly could have done so. Furthermore, Paraskevopoulos was closer to Kallimanis and in a better position than Pezzack to find out whether Kallimanis had paid or would pay his property taxes.
12In these circumstances it is not necessary to resolve the conflicts in the evidence. None of these chronologically subsequent encumbrances amount to material misrepresentations.
13There is another reason why it is not necessary to resolve the conflicts in the evidence. The handwritten agreement and any oral representations made in connection with it merged with the mortgage. See Canam Enterprises Inc. v. National Trust Co., [1998] O.J. No. 5396 (OC Gen. Div.) and cases cited therein. The involvement of independent counsel for the plaintiffs eliminates the viability of the argument of non est factum. The plaintiff may defend the counterclaim based on the provisions of the mortgage, not the agreement that led up to it. No such defence is apparent on the record.
14There is no need for a trial. I give judgment to the defendant on its counterclaim in the amount of $177,758.94 plus pre-judgment interest at the contractual rate from November 1, 2015 to date, and post judgment interest at the statutory rate from today on.
15The parties may make brief written submissions to costs, the defendant within 7 days and the plaintiffs within 7 days thereafter.
J.A. Ramsay J.
Date: 2015-11-20