Elle Mortgage Corporation v. Nesbitt, 2017 ONSC 7598
OSHAWA COURT FILE NO.: CV-17-1726
CORRIGENDA: 20171221
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Elle Mortgage Corporation
Plaintiff
– and –
William Greig Nesbitt, Jennifer Nesbitt and Vision 3000 Corporation
Defendants
Terry Walman and Balpreet Lailna, for the Plaintiff
Ryan Hanna, for the Defendant
HEARD: December 4, 2017
REASONS FOR JUDGMENT
(TEXT OF ORIGINAL Judgment HAS BEEN AMENDED – CHANGES APPENDED)
Overview
1The Plaintiff has brought a summary judgment motion seeking to take possession of the mortgaged properties. In the alternative, the Plaintiff seeks an order directing a power of sale, and foreclosing the Defendants’ right of redemption within 60 days of the order. The Defendants have been in default, and have not made any payments towards the mortgage since February, 2017. The Defendants oppose the motion claiming that they lacked proper advice in entering the mortgage.
2I grant the Plaintiff leave to sell the properties. My reasons, and the specific terms of my order are outlined below.
Facts
The Default
3The properties at issue include the property municipally known as 4261 Delta Road, Port Severn, ON P0E 1N0 being a residential single-family dwelling, and secondly, 4275 Delta Road, Port Severn, ON P0E 1N0 being vacant land (the “Properties”).
4The Properties were mortgaged for a period of three years commencing March 1, 2011, securing the sum of $721,500 and interest thereon at the rate of 4.65 per annum, calculated monthly, both before and after default, and as further renewed thereafter (the “Mortgage”).
5On June 5, 2017, the above Mortgage was transferred from Equitable Trust Company to the Plaintiff by Transfer of Charge in favour of the Plaintiff.
6The Mortgage provides that on default of any sum required to be paid under the Mortgage or failure to perform any obligations therein, the debt secured by the Mortgage becomes due and payable and the Plaintiff is entitled to possession of the Properties. The Mortgage further provides the Mortgagee may take court proceedings to foreclose the Mortgagors’ interest in the Property.
7On or about February 1, 2017, the Mortgagor defaulted in payment of the monthly payments under the Mortgage. On March 1, 2017, the Mortgage matured at which time the balance became due and payable, but was not paid by the Mortgagors. The Mortgage remains in default. The Mortgagor has not made any payments towards the Mortgage since February 1, 2017.
8Despite numerous demands, no payment has been received by the Plaintiff.
9The Plaintiff mortgagee, Elle Mortgage Corporation, commenced a mortgage foreclosure action against the Defendants, with William Greig Nesbitt being the Mortgagor and Jennifer Nesbitt, his consenting spouse added as a party.
The Proceedings
10The Plaintiff issued its Statement of Claim (Mortgage Action – Foreclosure) in the Superior Court of Justice, dated June 14, 2017. The Defendant served a Request to Redeem dated July 21, 2017 and a Statement of Defence dated July 24, 2017.
11In its initial response, Mr. Nesbitt disputed two items on a June 2017 discharge statement: being, legal fees of $2,200 and $13,142.16 default administration charge pursuant to Section 17 of the Mortgages Act, RSO 1990, c. M. 40.
12In light of the response, the Plaintiff served Mr. Nesbitt with a reduced accounting under the mortgage, as of October 31, 2017 so there would be no dispute to accounting under the Mortgage or the amount required to be paid by the Mortgagors to redeem their mortgage. The Plaintiff now claims strictly the principal plus interest, plus legal costs.
13After retaining counsel, Mr. Nesbitt filed an Amended Defence claiming that he and Ms. Nesbitt entered the Mortgage in 2011 without the benefit of independent legal advice (ILA). More particularly, the Nesbitts allege:
They were directed to Mark Epstein, a lawyer who was simultaneously representing the Equitable Trust Company and an already existing mortgagee, Vision 3000, which existing mortgagee had a vested interest in ensuring the Nesbitt’s entered into the mortgage with the Equitable Trust Company so that the pre-existing Vision 3000 mortgage would be paid; and
Had the Nesbitts received independent legal advice, including understanding the nature and type of terms of the mortgage, such as the foreclosure relief provided for therein, the Nesbitts would not have executed the mortgage documents for the Equitable Trust Company mortgage in 2011.
14The Defendants are now contesting the validity of the Mortgage itself, claiming that they were not aware of the risk of losing the Properties by entering into the Mortgage.
Test: Motion for Summary Judgment
Is there a Genuine Issue Requiring a Trial?
15Pursuant to Rule 20.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court shall grant summary judgment if it is satisfied there is no genuine issue requiring a trial. Animating the interpretation of 20.04(1) is Rule 1.04 which requires that the rule be liberally construed to secure the just, most expeditious and least expensive determination of a proceeding on its merits having regard to the complexity of the issues and the amounts involved.
16The judge in deciding whether to grant summary judgment must ask: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of trial? A trial is not required if the judge on the motion can 1) achieve a fair and just adjudication; 2) make the necessary findings of fact; 3) apply the law to those facts; and 4) the motion is a proportionate, more expeditious and less expensive means to achieve a just result rather than going to trial. As the Supreme Court explained in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, at para. 50:
These principals are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principals so as to resolve the dispute. [Emphasis added.]
Application to the Facts of this Case
17In this case, the Defendants resist summary judgment claiming that the question of consent is a genuine issue requiring a trial. More particularly, Mr. Nesbitt contests the Plaintiff’s right to enforce the Mortgage against the Properties on the basis that he was not given independent legal advice.
18Mr. Nesbitt is not contesting that he owes the money to the Plaintiff. He candidly acknowledges that he owes the Plaintiff the money, subject to a minor dispute regarding legal costs. However, he takes the position that he did not receive independent legal advice, and accordingly, the terms of the Mortgage are unenforceable against the Properties.
19I cannot accept Mr. Nesbitt’s contention. Anyone who pledges their home as security on a mortgage should be alive to the risk of losing it. While in some cases an absence of independent legal advice may vitiate consent, I see no basis to question the validity of the consent here.
20As the Court of Appeal explained in Bank of Montreal v. Duguid, 2000 CanLII 5710 (ON CA), 47 O.R. (3d) 737 (Ont. C.A.), at para. 25, if a mortgage is an act of a free and independent mind, the transaction will be valid even though no external advice was given. There is no suggestion that Mr. Nesbitt was pressured, tricked, or unduly influenced in his decision to enter the Mortgage. He was of sound mind and body when he signed it. There is no allegation of fraud, or deceit on the part of the lender, or the second Mortgagee. The Mortgage was granted on the basis of the security offered. I see no merit to Mr. Nesbitt’s claim that he did not foresee the risk that he could lose his Properties. He has been involved with the Mortgage since 2011. If there were questions, he had more than enough time to ask them.
21This is a clear case where enforcement of the Mortgage against the Properties is the only viable solution for the parties. Mr. Nesbitt is not in a position to pay the Mortgage. He has not paid any payments towards the Mortgage since February, 2017. The Properties are Mr. Nesbitt’s only remaining asset, and are listed exclusively in his name. It would be unreasonable to preclude the Plaintiff from acting against the Properties in the circumstances of this case.
22Jennifer Nesbitt claims no interest in the Properties and does not oppose the relief sought by the Plaintiff provided that the Plaintiff is not seeking to enforce the debt against her personally. The Plaintiff has confirmed they are not seeking to enforce against Ms. Nesbitt. Accordingly, I will grant summary judgment in favour of the Plaintiff. The Plaintiff’s entitlement, however, stands against Mr. Nesbitt alone.
Power of Sale
23The parties have agreed that if I grant the summary judgment in favour of the Plaintiff, the Properties should be dealt with by way of a power of sale. This agreement was reached during the course of the hearing. The one remaining issue is when the sale of the Properties can be effected.
24Mr. Nesbitt has requested that he be permitted to remain in the residence until May 7, 2018 to enable him to sort out his personal affairs, and move his belongings from the address. The Plaintiff resists this timeline and suggests that any continued occupation by Mr. Nesbitt should not be allowed. Mr. Nesbitt has been staying in the address since February, 2017 without paying anything towards the Mortgage. Mr. Nesbitt’s continued occupation is costing the Plaintiff money which is not being compensated. The Plaintiff instead proposes that I permit Mr. Nesbitt to stay until the end of December. Upon payment of $50,000, they would agree to Mr. Nesbitt staying until the end of January. According to the Plaintiff, this will help compensate the Plaintiff for the shortfall in the payments since February.
25Obviously the Plaintiff’s proposal does not make much sense given Mr. Nesbitt’s financial circumstances. Given the current situation, I will not require Mr. Nesbitt to leave the residential address prior to the end of May. The Plaintiff will continue to accumulate interest on the Mortgage until this date.
26If the Properties are not sold by the end of May, 2018, the Plaintiff is entitled to take possession of the Properties. This will enable the Plaintiff to insure, properly maintain, and manage the Properties with a view to disposing of them once the Nesbitts leave. It will also give Mr. Nesbitt the requisite incentive to assist the Plaintiff in selling the Properties.
Disposition
27In light of the above, I will order the following:
The Properties are to be sold immediately by way of power of sale.
Mr. Nesbitt will be permitted to remain in the residential address until June 1, 2018. Accordingly, any sale of the Properties will be subject to this term.
Mr. Nesbitt will be required to maintain insurance on the Properties, and keep the Properties in a proper state of repair. Mr. Nesbitt will also cooperate in the sale of the Properties.
The Nesbitts will be required to vacate the Properties by June 1, 2018, whether or not the Properties are sold, and turn possession of the Properties over to the Plaintiff on this date.
The Plaintiff can take full possession of the Properties on June 1, 2018. The Plaintiff can also obtain a Writ of Possession against the Properties on that date if the Properties remain unsold.
28I thank counsel for their assistance in this matter.
Justice C.F. de Sa
Released: December 20, 2017
CITATION: Elle Mortgage Corporation v. Nesbitt, 2017 ONSC 7598
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Elle Mortgage Corporation
Plaintiff
– and –
William Greig Nesbitt, Jennifer Nesbitt and Vision 3000 Corporation
Defendants
REASONS FOR JUDGMENT
Justice C.F. de Sa
Released: December 20, 2017
Amendments
The word ‘Applicant’ has been replaced with ‘Plaintiff’ in the following paragraphs as follows:
Paragraph [17] has been amended to reflect …Mr. Nesbitt contests the Plaintiff’s right to enforce the Mortgage…
Paragraph [18] has been amended to reflect …Mr. Nesbitt is not contesting that he owes the money to the Plaintiff. He candidly acknowledges that he owes the Plaintiff the money...
Paragraph [21] has been amended to reflect …It would be unreasonable to preclude the Plaintiff from acting against the Properties…
Paragraph [22] has been amended to reflect …Jennifer Nesbitt claims no interest in the Properties and does not oppose the relief sought by the Plaintiff provided that the Plaintiff is not seeking to enforce the debt against her personally. The Plaintiff has confirmed they are not seeking to enforce against Ms. Nesbitt. Accordingly, I will grant summary judgment in favour of the Plaintiff. The Plaintiff’s entitlement, however, stands against Mr. Nesbitt alone.
Paragraph [25] has been amended to reflect …The Plaintiff will continue to accumulate interest on the Mortgage until this date.
Paragraph [26] has been amended to reflect …the Plaintiff is entitled to take possession of the Properties. This will enable the Plaintiff to insure, properly maintain, and manage the Properties with a view to disposing of them once the Nesbitts leave. It will also give Mr. Nesbitt the requisite incentive to assist the Plaintiff in selling the Properties.