CITATION: Samra v. 7544405 Canada Inc., 2016 ONSC 1817
COURT FILE NO.: CV-14-62227
DATE: 2016-03-14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GEORGE SAMRA
Plaintiff
- and -
7544405 CANADA INC. AND STELLA CHINYERE KEMDIRIM
Defendants
Miriam Vale Peters, Kelly Manthorp Heaphy, for the Plaintiff
Self-Represented
HEARD: March 3, 2016, at Ottawa, Ontario
MADAM JUSTICE B. R. WARKENTIN
REASONS ON MOTION FOR SUMMARY JUDGMENT
The Plaintiff’s Motion
[1] The plaintiff seeks an Order granting him summary judgment against the defendants jointly and severally as result of the default of the defendants under two mortgages. The mortgages provide that upon default the plaintiff/mortgagee (the plaintiff) is entitled to possession and sale of the mortgaged property.
[2] On October 11, 2013, the defendants/mortgagors (the defendants) placed a first mortgage on the properties described in Schedule A to these reasons, in favour of the plaintiff securing the sum of $585,000.00. The interest rate was 10 per cent per year.
[3] This first mortgage provided that: “The sum of $4,875.00 is to be paid monthly on the 10th day of each and every month and interest thereon at the rate of 10 per cent per year, calculated monthly, not in advance as well after as before maturity and both before and after default. All legal fees incurred shall be added to the principal amount with interest.” The sum of $4,875.00 is an interest only payment.
[4] On April 7, 2014, the defendants placed a second mortgage on the same properties in favour of the plaintiff, securing the sum of $185,000.00 with interest owing at a rate of 10 per cent a year. The second mortgage provided that: “The sum of $1,541.66 is to be paid monthly on the 7th day of each and every month and interest thereon at the rate of 10 per cent per year, calculated half-yearly, not in advance as well after as before maturity and both before and after default. All legal fees incurred shall be added to the principal amount with interest.”
[5] The second mortgage provided that default of the first mortgage shall constitute default of the second mortgage. Both mortgages provided that on default of payment of any sum required to be paid under the mortgage, the principal becomes due and payable and the plaintiff/mortgagee is entitled to possession and sale of the mortgaged property.
[6] The defendants had made some payments of interest only on both mortgages but went into default on May 10, 2014 and have continued to be in default since that date. The plaintiff claims that as at March 3, 2016 the total owing on both mortgages was $915,295.80, which includes interest, NSF fees, penalties and the legal fee for the Notice of Sale.
[7] The plaintiff issued a Statement of Claim on October 8, 2014 with effective service of the Claim occurring on October 16, 2014. Notices of Sale were sent to the defendants on or about November 14, 2014.
[8] The defendants filed their Statement of Defence on November 20, 2014. In the Statement of Defence, the defendants admit they borrowed the funds and mortgaged the subject properties and that default occurred on May 13, 2014 on the first mortgage.
[9] The defendants denied that the amounts claimed by the plaintiff were owed. In particular, the defendants claimed that the plaintiff had miscalculated the balance owing and that the plaintiff had incorrectly included penalties and other fees that were not owing.
The Defendants’ Motion
[10] The defendants brought a cross motion seeking dismissal of the plaintiff’s motion for summary judgment and an order restraining the plaintiff from exercising its right to power of sale and sought an accounting of the monies owed.
[11] The defendants’ motion also seeks:
a) injunctive relief and a “declaration that the Notice of Sale is Null and power of sale cannot be exercised.”
b) an order dismissing the plaintiff’s claim pursuant to s. 23(1) of the Mortgages Act, RSO 1990, c M.40;
c) an order rescinding the mortgage contract pursuant to s. 4 of the Business Practices Act, RSO 1990, c B.18;
d) an order for a remedy under s. 2 of the Unconscionable Transactions Relief Act, RSO 1990, c U.2, in order to:
i) reopen the mortgage contracts and take account between the creditor and the debtor;
ii) reopen former settlements;
iii) order the creditor to repay any such excess if the same has been paid or allowed on account by the debtor;
iv) set aside either or in part or revise or alter any security given or agreement made in respect of the money lent;
e) an order affirming contributory default on the part of the plaintiff.
[12] When the defendants discovered that the Business Practices Act had been repealed in 2005, they claimed relief under Part III of the Consumer Protection Act, 2002, SO 2002, c 30, Sched A, alleging the plaintiff had engaged in unfair practice.
[13] In support of the defendants’ claims, the defendant, Stella Kemdirim (Kemdirim) alleges that the plaintiff misrepresented the actual agreement between the plaintiff and the defendants as to the nature of the second mortgage because the plaintiff had made an oral promise to the defendants to lift the second mortgage from some of the properties when the first mortgage to third party mortgagees was lifted. That third party mortgage was lifted upon the registration of the 185,000.00 mortgage (the new funds were used to pay out that third party mortgage).
[14] It was Kemdirim’s position that had the plaintiff followed through with his promise, she would have been able to refinance all of the properties and repay the amount owed on both mortgages to the plaintiff. By maintaining both a first and second mortgage on all properties, the plaintiff had effectively prevented her from any opportunity to obtain alternate financing and thus in essence was the cause of the defendants’ default.
Law and Analysis
[15] A court must grant summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence (Rules of Civil Procedure, RRO 1990, Reg 194, r 20.04(2)(a); Hryniak v Mauldin, 2014 SCC 7, at para 47 [Hryniak]).
[16] There is no genuine issue requiring a trial where the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. When the process allows the judge to make the necessary findings of fact, to apply the law to those facts, and it is a proportionate, more expeditious and less expensive means to achieve a just result, summary judgment is the appropriate remedy (Hryniak at para 49).
[17] In determining whether or not there is no genuine issue requiring a trial, a court shall consider the evidence presented by the parties on the summary judgment motion. A judge may also weigh evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence, unless it is in the interest of justice for such powers to be exercised only at trial (Rules of Civil Procedure, r 20.04(2.1); Hryniak at para 52).
[18] In determining whether to apply Rule 20.04(2.1), the judge should determine whether a full appreciation of the evidence and issues required to make a dispositive finding can be achieved by way of summary judgment, without a trial. The evidence need not be equivalent to that expected at trial, but the judge must be confident that the dispute can be resolved fairly (Hryniak, at paras 53, 57).
[19] Mr. Justice Hackland described the analysis a judge should undertake when considering a motion for summary judgment at paragraph 2 of the case of Beatty v Best Theratronics Ltd., 2014 ONSC 3376, as follows:
a) the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
b) on the basis of the record before it, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits; and
c) only where the court cannot grant judgment on the motion should the court then go on to decide some of the issues and then identify any remaining steps required to bring the proceeding to a conclusion.
[20] For the reasons that follow, I grant the plaintiff’s motion for summary judgment and dismiss the defendants’ cross motion.
[21] The defendants have admitted default. Kemdirim’s allegations that the plaintiff made a promise to her that he failed to honour is not credible. At all times Kemdirim was represented by a lawyer when the mortgages were negotiated and registered. Kemdirim admitted that without the plaintiff’s financing, she would have been subject to power of sale proceedings by the former mortgagees of her properties.
[22] Kemdirim has alleged that the oral promise was made prior to the registration of the mortgages. In support of that alleged promise she tendered an email she sent to her own lawyer setting out the terms she has claimed as the foundation of that promise and addressing her concerns. The mortgages were later registered and funds advanced on the terms set out in paragraphs 2 – 5 above. Kemdirim presented no other evidence in support of the alleged promise.
[23] The evidence of one email to Kemdirim’s lawyer prior to the registration of the mortgage does not satisfy me that there was the oral promise alleged. The mortgage was registered in accordance with the terms of the parties’ agreement and all parties had sophisticated lawyers and law firms representing their respective interests. The email itself demonstrates a high level of understanding of the mortgage process by Kemdirim and presumes that she obtained legal advice about her concerns prior to the registration of the mortgages.
[24] Kemdirim has also alleged that the plaintiff should have known that she would be unable to repay the mortgages and as such the mortgages should be set aside in whole or in part; or that they should be reopened and provide more favourable terms to the defendants. She relies on the Unconscionable Transactions Relief Act in support of this position, stating that the plaintiff made misrepresentations to her, that the cost of the loan advanced was excessive, harsh and unconscionable and that the defendants are of limited means.
[25] I do not accept Kemdirim’s position that the mortgages should be set aside or reordered in a manner that is more favourable to her. Kemdirim, by her own admission, was in financial difficulty when these mortgages were negotiated. She had been unable to obtain financing elsewhere, notwithstanding her efforts to do so. Kemdirim had legal advice regarding the terms of the mortgages and by virtue of the one email she tendered into evidence, she discussed those terms with her lawyer prior to the registration of the second mortgage.
[26] There was no evidence tendered by the plaintiff about her income or financial circumstances at the time she borrowed the funds and mortgaged the properties. Her evidence was that the money loaned to her under these mortgages prevented the properties from being the subject of power of sale proceedings by the prior mortgagee. I do not find that she was either a vulnerable or unsophisticated lender. In addition, the defendants defaulted on the first mortgage within a few months and have taken no steps to attempt to bring it into good standing or to make any payments whatsoever.
[27] Finally, the defendants’ claim that the Notices of Sale should be set aside for irregularities including miscalculations of the amount owing and deficiencies in the legal and property descriptions is also without merit.
[28] Any errors of the nature alleged by the defendants do not affect the substance of the form of the Notice of Sale. The Notice of Sale materials clearly set out the relevant information regarding the debt and the mortgages that secure the debt. Any calculation errors may be resolved by an accounting. The defendants are entitled to seek an accounting pursuant to Rules 55 and 64.06 of the Rules of Civil Procedure. The other alleged errors in the Notices of Sale are in the form of minor typographical errors that may be cured by operation of s. 36 of the Mortgages Act.
[29] I am therefore satisfied that there is no genuine issue requiring a trial in this proceeding and judgment shall issue in favour of the plaintiff, subject to the defendants’ right to an accounting as described above, as follows:
a) The properties secured by the first and second mortgages in favour of the plaintiff and registered on the defendants’ properties as described in Schedule A (subject to the plaintiff’s right to correct any typographical or other minor errors in describing the subject properties) shall be sold and the proceed of the sale applied towards the amount due under the mortgages;
b) The plaintiff is granted possession of the subject properties described in Schedule A (subject to the plaintiff’s right to correct any typographical or other minor errors in describing the subject properties);
c) The defendants shall pay to the plaintiff the sum of $915,295.80 being the amount due and owing under the first and second mortgages as of March 3, 2016 together with per diem interest of $210.95 until the date of this judgment.
d) Post-judgment interest in accordance with the Courts of Justice Act.
Costs
[30] The plaintiff is entitled to his costs of this motion. A Bill of Costs was submitted at the conclusion of the hearing in a sealed envelope by the plaintiff, and the defendants submitted their Bill of Costs on March 11, 2016. I have now reviewed both Bills of Costs wherein counsel for the plaintiff seeks $21,185.66 in fees and disbursements on a substantial indemnity scale, and the defendants’ substantial indemnity costs are $11,630.00 for those periods that the defendants were represented by counsel.
[31] The plaintiff has submitted that his fees should be paid on a substantial indemnity basis due to the nature of the mortgage action and the terms of the mortgages. I have reviewed his counsel’s Bill of Costs and find that there should be some reduction in the total fees for the motion for summary judgment and hereby fix the plaintiff’s costs payable by the defendants in the amount of $17,000.00 inclusive of HST and disbursements.
Madam Justice B. R. Warkentin
Released: March 14, 2016
Schedule “A”
The following are the legal descriptions of the subject properties:
- PART OF LOT 1 ON PLAN 528, DESIGNATED AS PARTS 1, 2 AND 3 ON PLAN 4R-23269. OTTAWA. SUBJECT TO AN EASEMENT IN GROSS OVER PART 2 ON 4R-23269 AS IN OC951647.
Municipally known as: 121 Elm Street, Ottawa, ON
- PART OF LOT 1 ON PLAN 528, DESIGNATED AS PART 2 ON PLAN 4R-22966. OTTAWA.
Municipally known as: 123 Elm Street, Ottawa, ON
- PART OF LOT 1 ON PLAN 528, DESIGNATED AS PART 3 ON PLAN 4R-22966. OTTAWA.
Municipally known as: 125 Elm Street, Ottawa, ON
- PT LT 16 CON 6RF GLOUCESTER AS IN GL65136; GLOUCESTER
Municipally known as: Leitrim Road, Ottawa, ON (Vacant Lot)
- PT LT 16 CON 6 RIDEAU FRONT GLOUCESTER PT 1 5R2505; GLOUCESTER
Municipally known as: Leitrim Road, Ottawa, ON (Vacant Lot)
- PART OF LOT 16, CONCESSION 6, RIDEAU FRONT, GLOUCESTER, BEING PARTS 3 AND 4 ON PLAN 5R-5205; SUBJECT TO AN EASEMENT OVER PART 4 ON PLAN 5R-5205 IN FAVOUR OF PART OF LOT 16, CONCESSION 6, RIDEAU FRONT, GLOUCESTER, BEING PART 1 ON PLAN 5R-5205 AS IN N373464; CITY OF OTTAWA
Municipally known as: Leitrim Road, Ottawa, ON (Vacant Lot)
CITATION: Samra v. 7544405 Canada Inc., 2016 ONSC 1817
COURT FILE NO.: CV-14-62227
DATE: 2016-03-14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GEORGE SAMRA
Plaintiff
- and –
7544405 CANADA INC. AND STELLA CHINYERE KEMDIRIM
Defendants
REASONS ON MOTION FOR SUMMARY JUDGMENT
Warkentin J.
Released: March 14, 2016