Court File and Parties
COURT FILE NO.: CV-16-547355 DATE: 20160825 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MANOUCHEHR BARADARAN, FARIBA BARADARAN, SABA BARADARAN by her litigation guardian, MANOUCHEHR BARADARAN and SAMA BARADARAN by her litigation guardian, MANOUCHEHR BARADARAN Applicants – and – HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, THE CITY OF TORONTO, as represented by THE ATTORNEY GENERAL OF ONTARIO Respondents
- and - LAWYERS PROFESSIONAL INDEMNITY COMPANY (LAW PRO) Respondents
- and – FRIEDMAN LAW FIRM, PATRICK BAKOS, Real Estate Counsel represent [JOHN DOE] Respondents
- and – DR. KARAM RAMZY and CHURCH YONGE ANIMAL CLINIC (Tenant) Respondents
Counsel: Manouchehr Baradaran, for the Applicants Baaba Forson, for the Respondent, Her Majesty the Queen in right of Ontario Justin W. Anisman, for the Respondent, LAWPRO Patrick Bakos, for the Respondent, John Doe
HEARD: June 27, 2016
LEDERER J.:
Introduction
[1] On January 12, 2016, the Sheriff of the Regional Municipality of York sold, by auction, the property located at 19 Church Avenue, in the City of Toronto. The property was owned by one or both of the applicants, Manouchehr Baradaran, and his wife, Fariba Baradaran. The sale was in furtherance of the failure of these two applicants to pay costs awards made against them following the dismissal of an action they had commenced and the subsequent dismissal of an appeal. The cost orders were in the amounts of $7,750 (the dismissal of the action) and $750.00 (the dismissal of the appeal). The property was sold for $1,050,000.
[2] By this proceeding, the applicants seek to set aside the sale and have the property returned to them. They say the sale was improvident (the value obtained was too low), the required process was not followed and they did not have notice.
[3] At the outset, before any inquiry as to what took place, one has to wonder how those involved could have allowed circumstances to develop such that a property of this value was sold to satisfy cost awards for so small an amount.
Background
[4] On November 6, 2012, Manouchehr Baradaran and Fariba Baradaran commenced an action against two lawyers they had retained to assist them with the purchase of a property located in Aurora, Ontario. Manouchehr Baradaran and Fariba Baradaran were unhappy with the fees they were charged and the services that were rendered. The lawyers were defended by their errors and omissions insurer, the Lawyers Professional Indemnity Corporation (“LawPro”). A motion was brought to strike the claim. It was dealt with by the court on July 30, 2013. The judge found that the claim was statute-barred. The applicable limitation period had expired. There were other grounds for the motion. The judge felt it was unnecessary to deal with them, but indicated that they were “established”. While they did not add substantively to the result, this may explain why the judge found the action was vexatious and why he determined that it was appropriate that costs be awarded on a substantial indemnity scale. This is the costs award for $7,750.
[5] The appeal that followed was dismissed on January 22, 2014. It had not been perfected as required by the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The appeal was dismissed for delay and costs fixed by the Deputy Registrar & Manager of Court Administration. This is the costs award for $750.
[6] Pursuant to these costs awards, LawPro filed Writs of Seizure and Sale, dated February 19, 2014 and February 24, 2014, with the Toronto and York Region Sheriffs. Among the properties which these writs covered was 19 Church Avenue, in the City of Toronto.
[7] By letter, dated September 5, 2014, the counsel for LawPro demanded payment of the costs awards from Manouchehr Baradaran and Fariba Baradaran. In the absence of a response or payment, on July 16, 2015, counsel for LawPro requisitioned the Enforcement Office of the Superior Court of Justice in Toronto to commence sale proceedings in regard to 19 Church Avenue, Toronto, Ontario. These instructions were acknowledged in a letter, dated July 17, 2015, from a Sales and Seizure Clerk in the Enforcement Office of the Ministry of the Attorney General.
[8] On January 12, 2016, the sale was completed. The price was $1,050,000. This motion is brought in response to that sale.
The Parties to This Application
[9] The two daughters of Manouchehr Baradaran and Fariba Baradaran are included as applicants. There is no apparent basis or rationale for this. Neither of the daughters was an owner of the property and they were not parties to the action in which the costs awards were made. During the course of his submissions, Manouchehr Baradaran indicated that he was concerned that, with the loss of 19 Church Avenue, he would be unable to provide his children with the necessities of life. Why this should be so is unclear. There was evidence that Manouchehr Baradaran owns several other properties and that the remainder of the funds paid on the sale are still with the Sheriff, to the credit of Manouchehr Baradaran and his wife.
[10] The respondents include the City of Toronto. As I understand it, the City was not served with the Notice of Application and has not participated in this proceeding.
[11] Friedman Law and Patrick Backos were also named as respondents. There is also reference to “Real Estate Counsel represent [John Doe]”. I understand that these parties, taken together, were the representatives of the purchaser of the property. The court was advised they were incorrectly named. The intention was to include, as a respondent, the purchaser, being 19 Church Holdings Inc. Material was filed on its behalf. It is represented by Friedman Law Professional Corporation and Patrick Backos.
[12] The style of cause also refers to Dr. Karam Ramzy and Church Yonge Animal Clinic as respondents. They are or were tenants of the property at 19 Church Avenue. The court was informed that there is an order dismissing the action as against these two parties.
[13] Based upon this understanding, the parties are the four applicants, two of which do not appear to have any interest in the matters that are the subject of this proceeding, and three respondents: Her Majesty the Queen in Right of the Province of Ontario, LawPro and 19 Church Holdings Inc.
The Applicants’ Complaints
[14] It was difficult to follow and understand the foundation of many of the complaints of the applicants. From the submissions that he made, it appears that Manouchehr Baradaran became aware of and reviewed clause 9 of a document apparently issued by the Ministry of the Attorney General and referred to as the Enforcement Procedures Manual. This clause provides instruction to sheriffs on the sale of land in furtherance of the enforcement of judgments and orders. It is referred to in a document labelled as “Factum Book”, dated June 16, 2016. and should be distinguished from the document entitled, “Factum of the Applicants”, dated April 16, 2016. The former appears to be a longer, revised version of the latter.
[15] I begin by observing that a manual published by a Ministry to help its staff and the public is neither legislation nor regulation. It is not the law. It exists to assist. Those involved are not bound by it. Nonetheless, the applicants rely on what they see as the failure to abide by its direction and rely on these alleged errors as the basis for setting aside the sale and the return of the property.
[16] In s. 9A.2.1, the Manual outlines the “Scope of Enforcement Office Responsibilities”. These include, among other things, the responsibility of the enforcement office to ensure that:
- A lawyer with expertise in real estate matters is retained to represent the enforcement office in accordance with the instructions provided in section 9A.2.3 of this chapter.
- All requisite parties receive notice of the time and place of the sale of land within the timelines required under the rules.
- A professional auctioneer is engaged by the enforcement office to conduct all land sales in accordance with the instructions provided in section 9A.2.4.
[17] In s. 9A.2.2, the Manual reviews the “Scope of Creditors Responsibilities”. These include, among other things, the responsibility of the creditor to:
- Provide documentation required by the Sheriff to effect a sale of land, including…an appraisal of the property…
[18] It is these supposed obligations that the applicants say were not complied with and on which they rely in support of this application.
The Appraisal
[19] From his submissions, it became clear that Manouchehr Baradaran believes that the price received was far below actual value of the land that was sold. The Manual proposes that it is the responsibility of the creditor to obtain an appraisal. There is no indication as to the required qualifications of the person who undertakes this work. In this case, the letter of July 16, 2015, which was the request to enforce the execution, included a “letter of opinion” regarding the market-value of the property. The letter of opinion is from Royal LePage, a well-known real estate brokerage operating in the Toronto area and beyond. It was referred to in the letter that enclosed it as “from a licensed realtor”. The value of the property is said to be between $1,200,000 and $1,300,000. While little is said about the work done to arrive at this conclusion, the letter indicates that consideration was given to several similar properties that have been sold in the same area. This is a comparative sales analysis. The sale price of each comparable was adjusted for the difference that existed between it and the subject property.
[20] The property sold for $1,050,000. Given a value between $1.2 and $1.3 million, this is not unreasonable and certainly not improvident.
[21] The only evidence to contradict the valuation provided by Royal LePage are assertions found in two affidavits both sworn jointly by Manouchehr Baradaran and Fariba Baradaran. In an affidavit sworn during April 2016, they say “…the actual market value …is $4,000,000 CND to $5,000,000 CND.” [1] In an earlier affidavit, this one sworn on February 25, 2016, the value is noted as $5,000,000. [2] These are bald statements. There is no analysis of any sort to support these figures proposed by the two applicants much less an independent, properly-qualified third party.
[22] I give no credence to the submission that the price received was improvident and that the sale on this basis was, in any sense, outside the responsibility of the sheriff or those conducting the sale.
The Auctioneer
[23] In an affidavit sworn on June 13, 2016, Manouchehr Baradaran deposed that during the cross-examination of Amy Wong (a Seizure and Sale Clerk with the Court Services Division of the Ministry of the Attorney General), he asked and she refused to identify the “Auctioneer Co.” that had been hired to conduct the sale. [3] This is not so. When the question was first asked, counsel objected, saying it was not relevant. [4] When it was asked again, the question was answered. The company that conducted the auction was identified as Corporate Assets Co. [5] In his submissions and in the “Factum Book”, Manouchehr Baradaran questioned whether an auction took place. He searched the website of the company and found a list of auctions which evidently outlined those sales conducted by Corporate Assets Co. over six months, from December 2015 to June 2016. There was no record of the sale of 19 Church Avenue. Thus, Manouchehr Baradaran submitted there was no auction.
[24] There is no question that the property was sold. For one thing, there is a buyer. For another, the whole point of this application is to set aside the sale and return the property to the applicants. The cross-examinations undertaken by Manouchehr Baradaran pre-supposes that there was a sale:
Q. No. No. I’m asking you. You sold my house, my business. How much was that I was owing? You don’t know. [6]
Q. ….. MR. BARADARAN: I want to see the credibility of the witness. I want to see how she has expert that was selling my property. [7]
Q. Of course I will show you, but you must be familiar with the file. You sold my property. Okay, go to page 37 of my document… [8]
[25] There is evidence that confirms the auctioneer was retained by the Sheriff to sell “lands” on January 12, 2016”. There is a Letter of Agreement entered into between Corporate Assets Inc. and the Ministry of the Attorney General for the sale of “Sheriff’s Sale of Lands” on that day. [9]
[26] There is evidence that 19 Church Avenue was purchased, at a Sheriff’s sale, on that day. The affidavit of Ramsey Shaheen (the sole director of the purchaser), sworn March 21, 2016, confirms that 19 Church Holdings Inc. purchased the property at a Sheriff’s sale on January 12, 2016, at 393 University Avenue in Toronto. It reviews the advice received by the individual who undertook the purchase on behalf of the buyer. The sale was conducted in an “auction format”. The affidavit includes, as an exhibit, an Agreement of Purchase and Sale confirming the sale of 19 Church Avenue, within a proceeding between the creditors (the lawyers who had been sued) and Manouchehr Baradaran and Fariba Baradaran. The purchaser is shown as the individual who attended on behalf of 19 Church Holdings Inc. and the price is shown as $1,050,000.
[27] There is direct evidence that there was an auction. When she was cross-examined, Eva Melamed, one of the lawyers who acted for LawPro, was asked questions about the sale. She said:
A. Yes there were multiple properties that were auctioned. [10]
[28] Manouchehr Baradaran asked questions that assumed there was an auction. They were each answered on that understanding:
Q. 19 Church Avenue, Toronto, Ontario M2N 4E7. Did you ask the sheriff on the day of the auction that where these people live?... [11]
[29] There is nothing, other than a hearsay deduction based on the absence of any reference to the sale on the website, to say there was no sale. There is evidence that supports the fact of the sale and that the sale was by auction.
The Real Estate Lawyer
[30] During her cross-examination, Jessica Fasulo-Liut, the Supervisor of the Enforcement Unit, made it clear that a lawyer was “on the file” and was among those who determined that $1,050,000 was a reasonable price. [12] The lawyer attended the auction. Manouchehr Baradaran understood that Jessica Fasulo-Liut was indicating there was an experienced real estate lawyer involved. [13] He wanted to know who that was. No answer was given but the fact remains that an experienced real estate lawyer was retained to assist those responsible for selling the property.
Notice
[31] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194 speak to the issue of notice when land is being sold. Rule 60.07 (19) says:
A sale of land shall not be held under a writ of seizure and sale unless notice of the time and place of sale has been,
(a) mailed to the creditor at the address shown on the writ or to the creditor’s lawyer and to the debtor at the debtor’s last known address, at least thirty days before the sale;
(b) published in The Ontario Gazette once at least thirty days before the sale and in a newspaper of general circulation in the place where the land is situate, once each week for two successive weeks, the last notice to be published not less than one week nor more than three weeks before the date of sale; and
(c) posted in a conspicuous place in the sheriff’s office for at least thirty days before the sale.
[32] The Sheriff sent the notices of sale of the property to Manouchehr Baradaran and Fariba Baradaran, on July 17, 2015 and November 19, 2015. The address used was that of the property to be sold (19 Church Avenue, Toronto, Ontario M2N 4E7). These notices were returned to the Sheriff as undelivered. As it is, on July 24, 2015, LawPro mailed the notice of July 17, 2015 to Manouchehr Baradaran and Fariba Baradaran, this time at their residence being 102 Church Avenue. It did the same with the notice of November 19, 2015. [14] The notice sent on November 19, 2015 advised that the sale would take place on January 12, 2016. The notice of Sheriff’s Sale of Lands that was enclosed was published in the Ontario Gazette on December 12, 2015 and in the National Post on December 16 and 23, 2015. [15]
[33] So far as I can see, there is no evidence that a notice of the sale was posted in a conspicuous place in the office of the Sheriff. This being the case, Rule 60.07(19)(c) of the Rules of Civil Procedure was not complied with. This is not fatal to the validity of the process leading to the sale:
Service is a quintessentially practical consideration. The only point of service is that the defendant must get notice of the claim against it. Service is not some sort of magical or formalistic ritual that has to be followed. While civil procedure recognizes certain forms of service, unconventional forms of service that actually bring the legal process to the attention of the person being served are still effective. [16]
This quote is from Sandu v. MEG Place LP Investment Corp., 2012 ABCA 266, at para. 19.
[34] In this case, there is no doubt, Manouchehr Baradaran and Fariba Baradaran received notice. When cross-examined, Manouchehr Baradaran acknowledged that he had received the notices of July 17, 2015 and November 19, 2015 as mailed to him and Fariba Baradaran by counsel for LawPro. [17] During this cross-examination, Manouchehr Baradaran conceded that, by November 2015, he knew that the auction was going to take place on January 12, 2015 and that to prevent the sale, he would need to obtain a court order:
Q. So by November you knew the date sale which was January 12, 2016. A. Yes. Q. And you knew that going to court before then was a possibility? A. Yes but you don’t know what happened to my life and that I have the serious issue with my chronic pain and diabetes and stuff. So I was several months I was sick and I was treatment by several doctors but again I get back to one point that I was in the middle of negotiation with the LAWPRO to resolve. Even I offer some settlement get any response. [18]
[35] On or about November 30, 2015, Manouchehr Baradaran e-mailed LawPro acknowledging the impending auction. He advised that he had sought independent legal advice:
Q. So the email says that you had consulted with three lawyers? A. Yes. Q. Is that true? And they told you that your property could not be sold easily since both you and your wife co-owned the property; is that correct? A. That is correct, yes. Q. So you did obtain independent legal advice on the sale? A. Yes. Yes but they told me that they cannot sell easily but also they told me that I should start negotiation to resolve this matter which I did. [19]
[36] By letter, dated January 6, 2012 (6 days before the public auction), LawPro advised Manouchehr Baradaran and Fariba Baradaran of the pending auction. They were reminded of the date, time and location of auction. Another copy of the notice of the Sheriff’s Sale of Lands was enclosed. On January 7, 2016, Manouchehr Baradaran telephoned Eva Melamed. He wished to discuss the sale. She asked him, in order to resolve the matter, to send an offer to her in writing. He never did so. [20] On January 11, 2016, Dr. Karam Ramzed, the tenant at 19 Church Avenue, called Manouchehr Baradaran twice to warn him of the sale to be conducted by the Sheriff on the following day. [21]
[37] In Toronto (City) v. Tseng, 2011 ONSC 4594, a defendant argued that he had not been properly served under the Rules of Civil Procedure despite having had actual notice of the application. The Master held that pretending the respondent had not been served:
… would amount to elevating form over substance. This proceeding would be placed on hold while the applicants continued with their efforts to personally serve the respondent in Massachusetts with a notice of application that has already come to her attention. This would be a complete waste of time and money and certainly not in keeping with the interpretation of the Rules mandated by Rule 1.04 (1) of the Rules of Civil Procedure. The purpose of service is notice and the respondent clearly has notice of this proceeding... [23]
[38] I find the applicants had notice.
[39] There are two further issues that require some discussion. Manouchehr Baradaran submitted that, at the time of the sale, he and LawPro were in the process of discussing a settlement. He said it was his understanding that the sale would not go on while settlement was being discussed. At the time, he was waiting for a response to an offer he had made. This is contrary to the evidence of Eva Melamed, who indicated she had asked that any offer be in writing. She explained this was her practice when dealing with individuals who are self-represented. This does nothing to assist the applicants. The possibility of settlement does not delay the sale of land pursuant to execution. In this case, there can be no doubt that, as a result of the “warning” provided by the tenant, the sale would take place.
[40] Finally, Manouchehr Baradaran responded to the letter from the Sheriff, dated November 19, 2015, and received by the applicants through correspondence from LawPro by outlining his lack of funds, implying that he had no money to pay the costs awards. [24] It transpires that Manouchehr Baradaran owns several properties. Even accounting for mortgages registered against these properties, Manouchehr Baradaran holds equity amounting to in excess of two million dollars. Shortly following the sale, he purchased 36 Wedgewood Drive, Toronto for over $2,075,000.
[41] For the reasons reviewed herein, the application is dismissed.
[42] If the parties are unable to agree as to costs, I will consider written submissions on the following terms:
- On behalf of each of the respondents, no later than 15 days following the release of these reasons. Such submissions are to be no longer than 3 pages, double-spaced, not including any Bill of Costs, Costs Outline or case law that may be referred to.
- On behalf of the applicants, no later than 10 days thereafter. Such submissions are to be no longer than 6 pages, double-spaced, not including any Bill of Costs, Costs Outline or case law that may be referred to.
- On behalf of each of the respondents, in reply if necessary, no later than 5 days thereafter. Such submissions are to be no longer than 1 page, double-spaced.
LEDERER J. Released: 20160825
Judgment
COURT FILE NO.: CV-16-547355 DATE: 20160825 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
MANOUCHEHR BARADARAN, FARIBA BARADARAN, SABA BARADARAN by her litigation guardian, MANOUCHEHR BARADARAN and SAMA BARADARAN by her litigation guardian, MANOUCHEHR BARADARAN Applicants – and – HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, THE CITY OF TORONTO, as represented by THE ATTORNEY GENERAL OF ONTARIO Respondents
- and - LAWYERS PROFESSIONAL INDEMNITY COMPANY (LAW PRO) Respondents
- and – FRIEDMAN LAW FIRM, PATRICK BAKOS, Real Estate Counsel represent [JOHN DOE] Respondents
- and – DR. KARAM RAMZY and CHURCH YONGE ANIMAL CLINIC (Tenant) Respondents
JUDGMENT
LEDERER J. Released: 20160825
Footnotes
[1] Affidavit of Manouchehr Baradaran and Fariba Baradaran, dated April 2016, at para. 1-O.
[2] Affidavit of Manouchehr Baradaran and Fariba Baradaran, dated February 25, 2016, at para. 1-H.
[3] Affidavit of Manouchehr Baradaran, sworn June 13, 2016, at p. 4, para. c).
[4] Cross-examination of Amy Wong, Transcript, April 19, 2016, at Q. 63-Q.64.
[5] Ibid, at Q. 143.
[6] Cross-examination of Amy Wong, Transcript, April 19, 2016, at Q. 157.
[7] Cross-examination of Debra Everleigh, Trancript, May 11, 2016, at Q. 96.
[8] Cross-examination of Eva Melamed, Trancript, May 11, 2016, at Q. 79.
[9] Supplementary Respondent’s Application Record of Her Majesty the Queen in Right of Ontario, at T.5.
[10] Cross-examination of Eva Melamed, Trancript, May 11, 2016, at Q. 193.
[11] Ibid, at Q. 301.
[12] Cross-examination of Jessica Fasulo-Liut, Transcript, May 2, 2016, at Q. 63.
[13] Ibid, at Q. 67, Q.75 and Q. 230.
[14] The letter sent by LawPro on November 19, 2015 does not refer to notice of the Sheriff's Sale of Lands as having been enclosed; however, a copy is included where the letter appears as exhibit M to the Affidavit of Karen Granofsky, sworn on March 17, 2016, and was said, by counsel for LawPro, to have been included (Factum Of the Respondent Lawyers Professional Indemnity Company, at para. 15).
[15] Affidavit of Amy Wong, sworn March 17, 2016, at paras. 26, 27, and Ex. P.
[16] Sandu v. MEG Place LP Investment Corp. 2012 ABCA 266, at para. 19.
[17] Cross-examination of Manouchehr Baradaran, Transcript, April 19, 2016, at Q. 66-Q. 67 and Q. 75-Q.77.
[18] Ibid, at Q. 84-Q. 85.
[19] Ibid, at Q. 88- Q. 90.
[20] Cross-examination of Eva Melamed, Transcript, May 11, 2016, at Q. 328.
[21] Affidavit of Karam Ramzy, sworn March 10, 2016, at paras. 22 (d) and (f).
[22] [2011] O.J. No. 3510, 2011, ONSC 4594, 87 M.P.L.R. (4th) 220.
[23] Ibid, at para. 18.