Court File and Parties

COURT FILE NO.: CV-16-545461 COURT FILE NO.: CV-16-547605 DATE: 20160412 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ALBINO ARMANASCO Applicant – and – LINDERWOOD HOLDINGS INC., VALOUR MORTGAGE SERVICES INC., OLYMPIA TRUST COMPANY, ANGELO SARA, 2202463 ONTARIO INC. and JOHN CARLISLE Respondents

Counsel: Michael Katzman for the Applicant Richard C. Belsito for the Respondent Linderwood Holdings Inc., Angelo Sara, and 2202463 Ontario Inc.

AND BETWEEN:

LINDERWOOD HOLDINGS INC., ANGELO SARA, and 2202463 ONTARIO INC. Applicants – and – ALBINO ARMANASCO Respondent

Counsel: Richard C. Belsito for the Applicants Linderwood Holdings Inc., Angelo Sara, and 2202463 Ontario Inc. Michael Katzman for the Respondent

HEARD: In writing

PERELL, J.

REASONS FOR DECISION - COSTS

[1] This is a request for costs by Albino Armanasco, a first mortgagee, who brought an application for court approval of the completion of his power of sale proceedings. The mortgagor, Linderwood Holdings Inc., its guarantor, Angelo Sara, and a corporation owned by Mr. Sara, 220263 Ontario Inc. brought a cross-application to enjoin the power of sale proceeding and a pending sale of Linderwood Holdings’ development property.

[2] The second mortgagee, Valour Mortgage Services Inc. opposed the completion of the power of sale and supported the request for an injunction.

[3] I dismissed both motions. See: Armanasco v. Linderwood Holdings Inc., 2016 ONSC 1605. I made no order as to costs against Valour Mortgage Services Inc., and I invited the other parties to make costs submissions.

[4] Mr. Armanasco claims costs of $24,189.78, all inclusive, on a substantial indemnity basis. He says that although unsuccessful on his own application, he successfully resisted the injunction request of the mortgagor, and he submits that the provisions of his mortgage entitle him to claim the costs of enforcing the mortgage.

[5] Mr. Armanasco’s mortgage contains the following provision:

INDEMNIFICATION OF CHARGEE

In the event the Chargee/Mortgagee shall, without fault on his/her part, be made a party to any litigation commenced by or against the Chargor/Mortgagor, the Chargor/Mortgagor shall protect and hold the Chargee/Mortgagee harmless from and shall pay all costs, expenses and solicitors and counsels fees on a solicitor and his/her own client basis. Such costs shall be a Charge on the lands and may be added to the loan secured hereby.

[6] Further, Mr. Armanasco submits that the mortgagor was attempting to interfere with his power of sale proceedings and that but for the actions of the mortgagor in failing to pay the mortgage and then encumbering the title to the property with conveyances and cautions, it would have been unnecessary for him to bring his application.

[7] Further still, Mr. Armanasco says that, practically speaking, the outcome of the competing applications was his success in completing the sale of the property pursuant to power of sale proceedings and costs should follow this success.

[8] Moreover, he says that Mr. Sara made unsubstantiated allegations of fraud, which justify an award of substantial indemnity costs.

[9] Linderwood Holdings, Mr. Sara, and 220263 Ontario Inc. submit that as a result of the dismissal of both the application and the cross-application, both parties should absorb their own costs.

[10] These Respondents point out that I held that Mr. Armanasco’s proceeding was unnecessary because he had the option of proceeding to close the pending sale, which the purchaser could not refuse to do because the doctrine of pendent lite and the natural lapsing of the registered cautions would protect the purchaser’s good title.

[11] The Respondents dispute that the standard charge terms in the mortgage apply to the circumstances of the immediate case.

[12] Further, they submit that the allegations of fraud remain to be determined in other proceedings and these allegations should not be factor in the exercise of the court’s discretion with respect to costs in the immediate case.

[13] In my opinion, leaving the matter of the allegations of fraud to be dealt with in the improvident sale action, Mr. Armanasco should have his costs as requested.

[14] In my opinion, the hold harmless provisions of the mortgage do apply.

[15] Linderwood Holdings, Mr. Sara, and 220263 Ontario Inc.’s arguments that in the circumstances of this case each party should bear their own costs are not persuasive. The Respondents’ arguments would only have traction if they had not brought the cross-application for an injunction.

[16] While it came about in a somewhat unusual way, the heart of the dispute was the Respondents’ manifest intention to prevent Mr. Armanasco from competing his power of sale. The Respondents’ request for an injunction was the substance of the dispute, and all the legal costs were incurred in anticipation of or in response to a request that was unsuccessfully made. Mr. Armanasco was the successful party and costs should follow that event.

[17] Accordingly, I award Mr. Armanasco costs of $24,189.78, all inclusive.

Perell, J. Released: April 12, 2016

COURT FILE NO.: CV-16-545461 COURT FILE NO.: CV-16-547605 DATE: 20160412 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ALBINO ARMANASCO Applicant – and – LINDERWOOD HOLDINGS INC., VALOUR MORTGAGE SERVICES INC., OLYMPIA TRUST COMPANY, ANGELO SARA, 2202463 ONTARIO INC. and JOHN CARLISLE Respondents

AND BETWEEN:

LINDERWOOD HOLDINGS INC., ANGELO SARA and 2202463 ONTARIO INC. Applicants – and – ALBINO ARMANASCO Respondent

REASONS FOR DECISION – COSTS

PERELL J. Released: April 12, 2016