Introduction

[1] Property located at 321 University Avenue in Belleville, Ontario (“the Property”) is scheduled to be sold on Monday, June 11, 2018. Operating pursuant to a power of sale, the Respondent, Duca Financial Services Credit Union Ltd. (“Duca”) intends to sell the property to the Respondent, Global Citrus Group Inc. (“Global”) on that date. Duca is the first mortgagee on the Property; the Applicant is the third mortgagee.

[2] This application is brought on an urgent basis. The Applicant requests (a) an order permitting it to redeem a mortgage made by the owner of the Property in favour of Duca (“Mortgage”), and (b) an injunction preventing Duca from selling the Property on June 11, 2018. The Applicant also requests procedural relief with respect to service of the motion materials on the Respondents.

Background

[3] In support of the request for injunctive relief, the Applicant submits that Duca conducted itself in bad faith vis-à-vis the Applicant, and the three-part test for entitlement to injunctive relief is met. A number of the allegations of bad faith stem from Duca’s conduct with respect to two agreements of purchase and sale into which it entered in early 2018. The second of the two agreements is the agreement of purchase and sale between Duca and Global (“the Agreement”). The Applicant alleges that Duca’s conduct prevented the Applicant from exercising its right to redeem the Mortgage.

[4] In February 2018, Duca entered into an agreement of purchase and sale with someone other than Global. That sale did not close. Shortly thereafter, Duca entered into the Agreement with Global. The Applicant asks the court to consider in particular Duca’s conduct as the first agreement of purchase and sale came to an end and Duca entered into the Agreement.

[5] The Respondents submit that, for a number of reasons, the Applicant is not entitled to the substantive relief sought:

a) The application is an abuse of process. The Applicant was aware in early May that the owner of the Property intended to bring an application for an injunction to prevent its impending sale. That application was heard, with the Applicant’s knowledge, on May 22, 2018, and dismissed. It was incumbent on the Applicant to bring its application at the same time or, in the alternative, in a timely manner;

b) The issues raised in this application were addressed on the owner’s application;

c) The Applicant did not and still does not have an absolute right of redemption and, in any event, failed to comply with the requirements of s. 22 of the Mortgages Act, R.S.O. 1990, c. M.40 (“Act”), with respect to redemption of the Mortgage; and

d) The Applicant has not met the three-part test for entitlement to injunctive relief.

Argument Abandoned by the Applicant

[6] On the return of the application, the Applicant advanced an argument not reflected in the materials it had delivered. The argument, of which the Respondents did not have notice, is that (a) the Agreement is null and void because a condition was not met by a specified deadline, (b) as a result, it remains open to the Applicant to redeem the Mortgage, and (c) the Applicant is entitled to an order requiring Duca to give the Applicant until noon on Monday, June 11, 2018, within which to redeem the Mortgage.

[7] The Respondents were granted leave to file additional materials by the end of the day on June 8, 2018. The Applicant was granted leave to file materials in reply, if necessary, by mid-day on June 9, 2018.

[8] The additional materials filed by the Respondents demonstrate that the relevant deadline was extended by the Respondents to April 19, 2018. As a result, the Agreement was not rendered null and void. In its reply materials, the Applicant withdrew its submission on this issue.

The Issues

[9] The issues on this application are:

Is the Applicant entitled to an order requiring Duca to give the Applicant until noon on Monday, June 11, 2018, within which to redeem the Mortgage?
Is the Applicant entitled to an injunction restraining Duca from selling the Property on June 11, 2018?
Is the application an abuse of process given the issues determined on the application by the former owner of the Property for injunctive relief and heard by Nakatsuru J. on May 22, 2018?

Issue No. 1 – Request for Opportunity to Redeem

a) The Law

[10] The parties agree that certain rights of redemption are granted to a mortgagor (and subsequent mortgagees) pursuant to s. 22 of the Act. Those rights are, however, time-limited; they may be exercised “at any time before sale under the mortgage” (s. 22(1)(a)).

[11] The phrase, “at any time before sale under the mortgage” has been interpreted to mean at any time before the acceptance by the mortgage of an offer to purchase (Logozzo v. Toronto Dominion Bank (1999), 1999 CanLII 9313 (ON CA), 45 O.R. (3d) 737 (C.A.), at paras. 19-32). Even if the offer accepted by the mortgagee is conditional, the right to redeem is lost (Armanasco v. Linderwood Holdings Inc., 2016 ONSC 1605, at para. 58).

[12] In addition, a mortgagor, or subsequent mortgagee may only redeem the mortgage if that individual has tendered the amount due under the mortgage and paid any expenses necessarily incurred by the mortgagee (s. 22(1)).

b) Chronology of Events

[13] In February 2018, Duca accepted an offer to purchase the property for $4,000,000 with a deposit of $200,000 and a closing date of April 30, 2018. The putative purchaser was someone other than Global. There is no evidence that, at any time prior to Duca’s acceptance of the offer, the Applicant gave Duca notice of its desire or intention to redeem the mortgage.

[14] Set out below is a condensed chronology of the events that transpired from February (when the first offer to purchase was accepted by Duca) through March 2018 (when Duca informed the Applicant that it was no longer open to the Applicant to redeem the Mortgage). The majority, if not all, of the communication described in the chronology was by email between the respective counsel of Duca and the Applicant. On occasion, an email included a letter attachment—also in the form of communication between Duca’s and the Applicant’s respective counsel.

Feb. 13, 2018 Duca informs the Applicant that (a) it has conditionally accepted an offer to purchase the Property, (b) the acceptance is conditional, on approval of Duca’s solicitor, for a period of five days to permit redemption of the mortgage, including by the Applicant, and (c) funds for redemption are “required by 4:00 p.m. on Tuesday, February 20.”

Feb. 16, 2018 The Applicant notifies Duca that it “wishes to redeem [the first] charge, subject to [the Applicant’s] receipt and approval of the Agreement of Purchase and Sale, and the terms and conditions thereof.” The Applicant requests that Duca provide it with a copy of the agreement as soon as possible. (Emphasis added.)

Feb. 16, 2018 Duca sends a copy of the discharge statement to the Applicant. Duca requests that a bank draft in the amount of $4.3M (rounded figure) be delivered no later than 4:00 p.m. on February 20. Duca informs the Applicant that “funds may be paid by way of a draft payable to [counsel for the Applicant] in trust, and delivered to [the office of counsel for the Applicant] in Toronto.”

Feb. 16, 2018 The Applicant repeats its request for a copy of the agreement of purchase and sale, stating that “[the Applicant’s] right of redemption cannot be meaningfully exercised without first reviewing the agreement of purchase and sale that [Duca has] accepted.” The Applicant adds that it has an offer to purchase the Property.

Feb. 17, 2018 Duca responds by inquiring, “How is that?” and stating, “If the third mortgagee wishes to redeem, please deliver the funds as indicated.”

Feb. 20, 2018 At 2:18 p.m., the Applicant advises Duca by email that, despite the lack of production of the agreement of purchase and sale, it will be redeeming Duca’s mortgage. The communication from the Applicant concludes with, “[the Applicant] is presently reviewing [Duca’s] payout statement” and counsel for the Applicant expects to “receive [the Applicant’s] comments in respect thereof in short order.”

Feb. 22, 2018 The Applicant requests from Duca a detailed breakdown of one of the line items in the payout statement.

Feb. 23, 2018 The Applicant repeats its request of Duca for a detailed breakdown of the line item in the payout statement.

Feb. 26, 2018 The Applicant repeats its request of Duca for the detailed breakdown and asks that it be provided access to the Property so that a potential tenant may be taken through it.

Feb. 26, 2018 Duca responds by stating that “[it believes] that it is too late to redeem.”

Feb. 26, 2018 The Applicant informs Duca that based on the anticipated inclusion in the agreement of purchase and sale of the standard redemption clause, it is not too late to redeem.

Feb. 27, 2018 Duca informs the Applicant that “[a]s indicated, it is too late to redeem.” Duca also says, “[i]n the event that an opportunity to redeem might arise in the future, we will advise.”

Mar. 22, 2018 The agreement of purchase and sale entered into in February does not close and is terminated on this date. Also on this date, Duca enters into the Agreement with Global. The purchase price is $5.3M, a deposit of $225,000 is required, and the closing date is May 14, 2018. (The closing date is subsequently postponed to June 11, 2018, and the purchase price amended to $4.8M.)

Mar. 22, 2018 Duca informs the Applicant that the first agreement of purchase and sale “has just been brought to an end. The sale will not be proceeding, and Duca’s mortgage can, for the time being, be redeemed.” (3:28 p.m.)

Mar. 23, 2018 Duca informs the Applicant that it has entered into an agreement of purchase and sale and, “its mortgage can no longer be redeemed.” (2:22 p.m.)

Mar. 23, 2018 The Applicant informs Duca, “I have requisitioned funds. They will be tendered on you. Please provide us with your wiring particulars.” (2:39 p.m.)

Mar. 30, 2018 The Applicant informs Duca, “We confirm that we are in funds to pay out Duca’s charge”. The Applicant states that it has not done so because it has not yet received the wire particulars previously requested and repeats its request for them.

Apr. 2, 2018 Duca informs the Applicant, “[t]he mortgage cannot currently be redeemed” and states that the wire particulars will not be provided.

c) Positions of the Parties

[15] The Applicant submits that the notice given on February 16, 2018, of its desire to redeem the Mortgage is the first of a number of occasions on which it gave notice of Duca its intention to do so. The Applicant argues that Duca’s conduct thereafter ignored that expressed intention to redeem and precluded the Applicant from redeeming the Mortgage.

[16] Duca submits that the Applicant was, throughout the relevant period, made aware in a timely manner of the status of the first agreement of purchase and sale and of the Agreement. Duca argues that the Applicant was fully aware as to when its right to redeem the Mortgage existed; the Applicant failed, however, to exercise that right before it was lost.

d) Analysis

[17] There can be no doubt that the Applicant was at all times aware of the requirement to tender as a pre-condition to redemption of the Mortgage. At paragraph 24 of the May 30, 2018, Collina affidavit sworn in support of this application, the President of the applicant corporation says:

2496582 remains ready, willing and able to redeem the charge in favour of Duca. In this respect, on or about April 11, 2018, $4,600,000 was paid into the trust account of [the Applicant’s counsel] for the purposes of redeeming the Duca charge, and those funds have remained in that account to this time.

[18] When was the Applicant first “ready, willing and able to redeem” the Mortgage? Was it ready to do so at any time prior to April 11, 2018, when the $4.6M was paid into its counsel’s trust account?

[19] I find that at no time after giving notice, as early as February 2018, of its desire or intention to redeem, did the Applicant tender—even after it had been directed by Duca as to the method by which to complete tender. The Applicant provides no evidence, no statutory authority, and no case authority to support a conclusion that Duca was not within its rights to direct the method of tender.

[20] As the circumstances with respect to the agreements of purchase and sale in this matter demonstrate, things can move quickly in the context of commercial real estate transactions. I find that the Applicant was not in any way taken by surprise by the speed with which the first transaction came to an end and Global’s offer was accepted.

[21] The uncontradicted evidence is that at 3:28 p.m. on March 22, 2018, Duca informs the Applicant that the agreement of purchase and sale it had accepted in February “has just been brought to an end; the sale will not be proceeding, and Duca’s mortgage can, for the time being, be redeemed.” Shortly after 1:00 p.m. on March 23, 2018, Duca accepts Global’s offer (Jun. 1/18 Cosmain affidavit, at para. 86). At 2:22 p.m. on March 23—1 hour and 22 minutes after Global’s offer is accepted—Duca informs the Applicant of the acceptance of that offer.

[22] From March 22 to 23, 2018, there were 23 hours during which the Applicant had an opportunity to exercise its right to redeem. Duca was not under any obligation to give the Applicant a greater amount of time within which to tender and exercise its right to redeem. It is clear from the evidence that Duca had exercised patience with the mortgagor for a number of years, to no avail. Duca had decided that it was going to sell the Property and it was entitled to do so (Canada Trustco Mortgage v. Gutstadt (1997), 38 O.T.C. 150 (Gen. Div.), at para. 10, aff’d 1998 CanLII 17697 (ON CA), 108 O.A.C. 315 (C.A.)).

[23] In Atalla v. Moody, 2017 ONSC 1971, Trimble J. highlighted that tendering is a pre-condition to redemption of a mortgage. At paragraph 50, Trimble J. concluded that “[o]nly tendering or payment into court would satisfy this requirement.”

[24] Why, if the Applicant was intent on redeeming the Mortgage, did the Applicant not arrange in February, when it gave notice of its desire and/or intention to redeem, for funds to be immediately available so that it could exercise its right of redemption when that right existed? More importantly, why did the Applicant not tender during the 23-hour period from March 22 to 23, 2018, during which the opportunity to redeem existed?

e) Summary

[25] In accordance with the principles set out in Logozzo, once Duca accepted Global’s offer to purchase the Property, the Applicant’s right pursuant to s. 22 of the Act to redeem the Mortgage was extinguished. I find that by failing to tender when it had the opportunity to do so, the Applicant lost the right to redeem the Mortgage.

[26] I also find that there are no exceptional or extreme circumstances giving rise to the equitable jurisdiction of the court to intervene in the power of sale proceeding (Frometa v. Oliveira, 2014 ONSC 4382, at para. 22).

Issue No. 2 – Injunctive Relief Based on Alleged Bad Faith Conduct

a) The Law

[27] In support of its request for injunctive relief, the Applicant relies on the three-part test set out in R.J.R. MacDonald Inc. v. Canada, 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311. That test applies to a request for an interlocutory injunction.

[28] The Applicant does not identify in its materials whether it is requesting an interlocutory or a permanent injunction. I note, however, that if an injunction were granted and the Applicant redeemed the Mortgage, the effect would be that of a permanent injunction precluding Duca from selling the Property. The test for entitlement to a permanent injunction is more stringent than the test for entitlement to an interlocutory injunction.

[29] The application was argued, however, on the basis that the request is for an interim injunction and the three-part test from R.J.R. MacDonald applies:

i) There is a serious issue to be tried;

ii) The party seeking the injunction will suffer irreparable harm if the injunction is not granted; and

iii) The balance of convenience favours granting the injunctive relief sought.

[30] For the reasons that follow, I find that the Applicant has not met the three-part test for an interlocutory injunction. The Applicant also fails to meet the more stringent test to be applied had the argument on the application addressed entitlement to a permanent injunction.

b) Analysis

i) Serious Issue to be Tried

[31] The Applicant submits that it raises a serious issue to be tried with respect to the alleged bad faith conduct on Duca’s part. The Applicant identifies eight elements of Duca’s conduct which, it is argues, are indicative of bad faith.

[32] One of the eight elements of Duca’s alleged bad faith conduct is the failure on Duca’s part to engage with the Applicant in the redemption process. For the reasons set out with respect to Issue No. 1, I find that there was no failure on Duca’s part to engage with the Applicant in the redemption process.

[33] Another element of Duca’s alleged bad faith conduct raised by the Applicant is Duca’s failure to include in the Agreement a redemption clause based on the Ontario Real Estate Association (“OREA”) standard wording for such a clause.

[34] It is not disputed that some agreements of purchase and sale include a redemption clause that has, over time, been reduced to standard wording. Paraphrasing, the standard redemption clause sets out that the purchaser understands and agrees that (a) the mortgagor has the right to redeem the property until such time as conditions are met or waived, and (b) the agreement of purchase and sale is subject to that right. The standard clause provides that if the mortgagor redeems the property, the agreement of purchase and sale shall be null and void. In that circumstance the purchaser’s deposit shall be refunded in full without interest.

[35] The Agreement does not include a redemption clause. Instead, the Agreement includes the following, which I refer to as a termination clause:

In the event [Duca] is unable to complete this Agreement as a result of a Court of competent jurisdiction preventing the completion of the within transaction by an interim, interlocutory or permanent injunction or otherwise (whether or not under appeal), then [Duca] shall have the right to terminate this Agreement or extend its closing date from time to time for periods in the aggregate not to exceed ninety (90) days by notice in writing delivered to [Global] or its solicitor at any time on or before closing or on or before any extended closing date. If this Agreement is so terminated, the deposit shall be returned to [Global] without interest or penalty and without liability of [Duca] whatsoever.

[36] The Applicant’s argument with respect to this element of the alleged bad faith conduct overlooks the basic principles applicable to redemption of a mortgage. The basic principles are set out in Logozzo, at paragraphs 43 and 44:

A redemption clause, even if included in an agreement of purchase and sale, creates no rights and does not give rise to any foundation upon which a mortgagor may prevent the completion of the sale of the property. The mortgagor, who is not a party to the agreement of purchase and sale, has no right to enforce a redemption clause (para. 44).
A redemption clause, even if included in an agreement of purchase and sale, does not give a mortgagor the right to redeem the mortgage beyond the time permitted by s. 22(1)(a) of the Act (para. 44).
The inclusion of a redemption clause in an agreement of purchase and sale does not render the agreement a conditional one (para. 43).

[37] For those reasons alone, I find that the absence of a redemption clause in the Agreement is not evidence of bad faith on Duca’s part. I have, in any event, also considered the following:

While standard wording is available for agreements of purchase and sale, reliance on that wording is not mandatory. Duca and Global were not required to agree to include the standard-wording redemption clause in the Agreement;
There is insufficient evidence to establish that there was any bad faith on the part of Duca in agreeing to the termination clause; and
By relying on the termination clause (as opposed to the standard-wording redemption clause), Global is in a position, as on this application, to participate in any court process in which there is a risk of an order being made that would impact upon Global’s rights pursuant to the Agreement. Less protection is afforded to Global pursuant to the standard-wording redemption clause; a clause that is clearly to the benefit of Duca as the vendor.

[38] In summary, I find that the absence of the standard-wording redemption clause from and the inclusion of the termination clause in the Agreement is not evidence of bad faith conduct on Duca’s part.

[39] The Applicant also relies on paragraph 21 of the Agreement as evidence of what it was entitled to expect in terms of a method by which to tender. Paragraph 21 is titled “Tender” and says:

Any tender of documents or money hereunder may be made upon Seller or Buyer of their respective lawyers on the date set for completion. Money shall be tendered with funds drawn on a lawyer’s trust account in the form of a bank draft, certified cheque or wire transfer using the Large Value Transfer System.

[40] Paragraph 21 is part of the standard wording of the OREA Commercial Agreement of Purchase and Sale. Parties to such an agreement are not bound to include only standard terms; nor are they precluded from amending standard terms. I note that a number of the paragraphs in the Agreement have been struck out in whole or in part.

[41] In any event, the “Tender” paragraph is from an agreement to which only Duca and Global are parties. I find that there is nothing, including any statutory provision, to compel Duca to comply with the “Tender” paragraph when dealing with the Applicant in the context of redemption of the Mortgage. I find that Duca’s failure or refusal to provide wire particulars (as requested by the Applicant so as to permit it to tender in that manner) does not constitute an element of bad faith conduct on Duca’s part.

[42] Given the brief amount of time within which to determine the application, I do not specifically address each of the other eight elements of alleged bad faith conduct. I turn briefly to three such elements:

The Applicant submits that Duca precluded the Applicant from accessing the Property in the fall of 2017 in or about the time at which the Property was being listed for sale. I find that the evidence does not support such a conclusion;
The Applicant submits that Duca’s refusal to produce copies of either of the agreements of purchase and sale entered into in 2018 constitutes an element of bad faith. Duca provides an explanation for its refusal to produce copies of either agreement. I am satisfied that the explanation is reasonable and is not indicative of bad faith conduct on Duca’s part; and
The Applicant argues that Duca failed to provide, in a timely manner, the particulars requested by the Applicant of a line item in the payout statement. The evidence does not support such a finding.

[43] In summary, the allegations made by the Applicant that Duca acted in bad faith do not raise a serious issue to be tried. The Applicant fails to satisfy the first part of the three-part test for an interlocutory injunction to be granted.

ii) Irreparable Harm

[44] The Applicant submits that the sale price in the Agreement is much lower than the potential sale price for the Property—in particular if consideration is given to the value of the Property if leased to a tenant (“tenanted”). The Applicant submits that if it is not given the opportunity to redeem the Mortgage, it will lose the opportunity to hold on to the Property and sell it in due course (i.e. when it is tenanted) at a much higher purchase price than $4.8M.

[45] In support of that argument, the Applicant relies on a report prepared in 2014 (“the Appraisal Report”). The author of the Appraisal Report describes the Property as “a Multi-Tenant Warehouse” and expresses the opinion that the appraised value of the Property is $18.6M.

[46] For a number of reasons, I find that the Applicant’s reliance on the Appraisal Report as evidence of the potential sale value of the Property—and therefore the irreparable harm the Applicant may suffer—is misplaced.

[47] First, the stated purpose of the 2014 appraisal is “to provide an estimate of ‘market value’ for internal company asset valuation.” The company for whom the asset valuation was provided is the former owner of the Property, whose mortgage went into default approximately two years ago. I find that the Appraisal Report was not provided for the purpose of assisting the former owner of the Property to determine a fair market value in the context of a potential sale of the Property.

[48] Second, the contents of the Appraisal Report are said to be “based on market conditions existing as of the effective date of the appraisal, May 7, 2014.” Even if the ‘market value’ of the Property set out in the report was for the purpose of a potential sale of the Property, the opinions expressed are now more than four years old. There is no evidence as to the extent to which market conditions have changed in four years or as to the impact such changes may have on a potential fair market value for the sale of the Property.

[49] As evidence of the existence of the potential to sell the Property at a price significantly higher than $4.8M, the Applicant also relies on communication between its President (Collina) and the President/Project Manager of VRE Systems. Collina does not identify the individual from VRE Systems by name. Collina’s evidence is that (a) he met with that individual on February 20, 2018, and (b) after that meeting the individual sent Collin a text message stating, “Don’t let this building go. I’ll guaranteed (sic) find someone to buy it for at least $8.5−9 million.”

[50] Collina does not specify how close in proximity to the end of the February 20, 2018, meeting that message was sent—on the same day, several days later, a week or more later? There is no evidence of any other communication between the President/Project Manager of VRE Systems and anyone on behalf of the Applicant. Nonetheless, Collina says, “I verily believe that VRE Systems remains interested in the Property and that a sale of at least $8.5M remains possible.”

[51] It is also Collina’s evidence that there may exist a purchaser (a group of Mexican individuals) willing to pay as much as $10M to purchase the Property. The evidence as to the existence of such a purchaser and, assuming such a purchaser exists, their willingness to pay $10M to purchase the Property falls far short of assisting the Applicant in satisfying the second part of the three-part test.

[52] I pause to note that Collina’s evidence with respect to VRE Systems and the group of Mexican individuals is (a) based on information and belief, and (b) with respect to a contentious matter (the potential sale value of the Property). That evidence does not meet the requirements of sub-rule 39.01(5) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. That evidence is therefore not admissible on the application.

[53] I have also considered the evidence with respect the offer made by Global to the Applicant on March 8, 2018 (two weeks before Global made the offer accepted by Duca). At that time, Global offered a purchase price of $5.5M. Two weeks later, Global’s offer to Duca was for a purchase price of $5.3M. On agreement between Duca and Global, the purchase price was subsequently reduced to $4.8M. The explanation for the reduction in the purchase price is problems identified with the roof of the building on the Property.

[54] The Applicant focusses on harm that is quantifiable in monetary terms. The irreparable harm required to establish entitlement to an injunction is harm that cannot be quantified in monetary terms.

[55] I find that the Applicant has not established that it will suffer irreparable harm by reason of the existence of a realistic opportunity to sell the Property, in its current state, at a price significantly higher, if higher at all, than $4.8M. In addition, the Applicant has failed to establish that it will suffer irreparable harm by reason of the loss of an opportunity to redeem the Mortgage, hold on to the Property, and sell it in the future once the Property is tenanted.

[56] In the event the Applicant suffers financial harm as a result of the sale of the Property on June 11, 2018, then it is open to the Applicant to pursue Duca on the basis of a claim of improvident sale.

iii) Balance of Convenience

[57] The Applicant relies on the termination clause (see para. 35, above) in the Agreement in support of its argument that Duca will not be inconvenienced in any way if the Applicant is permitted to redeem the Mortgage and the Agreement is terminated. That argument overlooks (a) the opportunities given by Duca to the mortgagor to remedy the default, (b) the communication from Duca to the Applicant, keeping the latter up to date with respect to efforts to sell the Property, (c) Duca’s right to proceed, as it has, to sell the Property, and (d) Global’s reliance on the Agreement.

[58] In support of their respective arguments with respect to abuse of process (Issue No. 3), the Respondents rely on the events of early to late May 2018. In my view, those events are also relevant to the issue of balance of convenience. In early May, the mortgagor arranged for its application for an injunction to be heard—in an effort to prevent Duca from selling the Property to Global. With the knowledge and in the presence of counsel for the Applicant, counsel for the mortgagor arranged for his client’s application for an injunction to be heard on May 22, 2018, in Toronto by Nakatsuru J.

[59] Counsel for the Applicant was present at the return of the mortgagor’s application for an injunction. Counsel for the Applicant did not file materials and did not make submissions on that application. It was clearly open to the Applicant in May 2018 to file materials and make submissions in support of the mortgagor’s application or, in the alternative, bring an application at the same time as the mortgagor. No explanation is offered by the Applicant as to why it did not do so.

[60] In the end, the Applicant’s request for an injunction was heard on short notice, without opportunity for cross-examination on the supporting affidavits, on the afternoon of Thursday, June 7, 2018 (four days prior to the date of the impending sale). I find that the balance of convenience weighs heavily in favour of Duca and Global.

c) Summary

[61] The Applicant fails to satisfy the three-part test for entitlement to an interlocutory injunction. The Applicant also fails to satisfy the more stringent test for entitlement to a permanent injunction.

Issue No. 3 – Abuse of Process

[62] Included in the record are copies of (a) the factum delivered on behalf of the mortgagor for its application for an injunction heard by Nakatsuru J. on May 22, 2018, and (b) the handwritten endorsement of the presiding judge. The Respondents argue that the contents of those documents demonstrate that the majority of the issues raised on the present application were addressed by Nakatsuru J. in May.

[63] It is not a requirement, for a finding of abuse of process to be made, that the parties in one matter be the same as the parties in a subsequent matter (Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 37). An abuse of process arises when a litigant “in essence attempt[s] to relitigate a claim which the court has already determined” (Toronto (City), at paras. 37 and 38).

[64] In the short time available to me, and given the time required to address Issue Nos. 1 and 2, it is not possible to consider the merits of the Respondents’ abuse of process argument. To do so would require careful consideration of the contents of the factum delivered in May on behalf of the former owner of the Property and a comparison of the contents of that document to the issues addressed in the three facta delivered on the application before me.

[65] Given my findings on Issue Nos. 1 and 2, the outcome on Issue No. 3 will not have any bearing on the outcome of the application per se. The outcome on Issue No. 3 may, however, be relevant to the issue of costs of the application. Therefore, if one or more of the parties requires a ruling from me on Issue No. 3 they may request same. The request shall be made in writing, addressed to the Trial Coordination Office in Ottawa no later than 2:00 p.m. on Friday, June 15, 2018. Unless a request is made by that date and time of day, I shall conclude that the parties do not require a ruling on Issue No. 3.

[66] Leaving aside the substantive issue of abuse of process, I am, in any event, concerned about a number of matters of process:

The timing of the present application: (a) less than two weeks prior to a closing date that has been known for over two months, and (b) approximately one month after it was known that the mortgagor was proceeding with a similar application returnable two weeks earlier;
Short service: A matter raised by the Respondents but not fully addressed because there was insufficient time scheduled by the Applicant for the oral hearing. The matter was scheduled for a half-day;
The lack of meaningful opportunity for cross-examination on the supporting affidavits; and
An argument raised on the return of the application that was (a) not raised in the written materials filed on behalf of the Applicant, and (b) in any event, abandoned.

[67] Those factors are not sufficient to support a finding that the application is an abuse of process; they relate to the conduct of the Applicant in the context of this proceeding.

Disposition

[68] The application is dismissed in its entirety.

[69] If any one or more of the parties requires a ruling on Issue No. 3, the party or parties shall request same in writing, addressed to the Trial Coordination Office in Ottawa, and delivered to that office no later than 2:00 p.m. on Friday, June 15, 2018. Otherwise, a substantive ruling on Issue No. 3 will not be delivered.

Costs

[70] In the event the parties are unable to agree upon costs of the application, they may make written submissions as follows:

a) The submissions shall be limited to a maximum of four pages, exclusive of a bill of costs;

b) Written submissions shall comply with r. 4.01(1) of the Rules of Civil Procedure;

c) Hard copies of any case law or other authorities relied on shall be provided with the submissions and shall comply with r. 4.01(1), item 2 of the Rules of Civil Procedure with respect to font size;

d) The submissions, the documents referred to therein, case law, and other authorities, shall be on single-sided pages;

e) Written submissions shall be delivered by 5:00 p.m. on the twentieth business day following the date on which this Ruling is released; and

f) In the event any party wishes to deliver a reply to the costs submissions of an opposing party, the reply submissions shall be delivered by 5:00 p.m. on the twenty-fifth business day following the date on which this Ruling is released. Reply submissions shall comply with paragraphs (a) to (d) above.

Madam Justice Sylvia Corthorn

Date: June 15, 2018

COURT FILE NO.: 18-76635

DATE: 2018/06/15

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

2496582 Ontario Inc.

Applicant

– and –

Duca Financial Services Credit Union Ltd. and Global Citrus Group Inc.

Respondents

RULING ON AN APPLICATION

Madam Justice Sylvia Corthorn

Released: June 15, 2018

2496582 Ontario Inc. v. Duca Financial Services , 2018 ONSC 3749

Case Summary

Introduction

Background

Argument Abandoned by the Applicant

The Issues

Issue No. 1 – Request for Opportunity to Redeem

Issue No. 2 – Injunctive Relief Based on Alleged Bad Faith Conduct

Issue No. 3 – Abuse of Process

Disposition

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 2

Legal Tests 1

Legislation 3