Court File and Parties
COURT FILE NO.: CV-15-534765 MOTION HEARD: 20180329 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Indus Mortgage Inc., Plaintiff/Moving Party AND: Sameera Asif, Defendants/Moving Party
BEFORE: Master P. T. Sugunasiri
COUNSEL: Gligoric, G., Counsel, for the Plaintiff/Moving Party Asif, S., Defendant in person Azeez, A., as agent for Asif, S.
HEARD: March 29, 2018
Endorsement
Overview:
[1] This is a mortgage action. On June 3, 2016, Master Haberman granted partial judgment to the Plaintiff in the amount of $57,259.50 plus interest at 12% per annum, $5000 in costs plus interest at 3% per annum, and possession of a residential property municipally known as 2230 Lakeshore Blvd, Suite 3405, Toronto, M8V 0B2 (“2230 Lakeshore”).
[2] After judgment, Mr. Azeez as agent for his wife, brought a motion relating to a dispute as to the redemption value of the property. Master Dash sitting as duty Master, went beyond the call of duty and assisted the parties in negotiating Minutes of Settlement on this issue. Those minutes were executed on November 21, 2016.
[3] On April 21, 2017 Azeez and Asif appear to have brought a motion before Master Brott which led to the setting aside of Master Haberman’s order. From Master Brott’s endorsement it appears that the issue continued to be the cost of regaining possession of 2230 Lakeshore despite the executed minutes. It also appears that the motion before Master Brott was alleged to have been brought on notice with the Plaintiff being unopposed. The order signed by the registrar months later to reflect Master Brott’s disposition in her endorsement goes so far as to say that the motion was brought on consent. This was clearly incorrect even on the principle that the order should match the endorsement. On that basis alone I have already set aside the issued and entered order when the parties appeared at the second return of this motion.
[4] The Plaintiff now seeks to set Master Brott’s endorsement aside on the basis that it was made ex parte, no materials relating to the motion can be found in the court file despite diligent efforts on the part of the Plaintiff to locate them, there is no affidavit of service available to confirm proof of service, and Azeez does not have a copy of the affidavit of service nor has he provided any other proof of service. The Plaintiff did not even obtain a copy of the formal order from Azeez but rather had to retrieve it from the Court office at a later date after the order had been signed.
[5] By way of cross-motion, the issue of redemption continues to be alive and well. Azeez and Asif again seek relief with respect to the redemption value of 2230 Lakeshore. In Azeez’s supporting affidavits sworn November 16, 2017 and January 28, 2018 he takes the position that the minutes mediated by Master Dash was signed by his wife under duress. However, at the hearing, Azeez indicated that he would be happy to abide by the minutes because it capped the redemption amount to a quantum far less than the $158,000 that the Plaintiff is now claiming as the value.
Analysis:
[6] In my view, there are two narrow issues to be determined. First, should Master Brott’s endorsement be set aside on the basis that the Plaintiff had no notice of that crucial motion? I conclude that it should. I accept the Plaintiff’s evidence that it never received notice of the motion brought before Master Brott and that the master was misled about such notice. Rule 37.14 allows a master to set aside the order of another master on motion by a party who had insufficient notice of the motion. The Plaintiff’s affiant, Ms. Kuppa, swears in her affidavit that the Plaintiff did not know about the Brott order until Ms. Kuppa saw that it was attached to a small claims action commenced by Azeez in July of 2017. The motion to set the order aside was first returnable on October 21, 2017. No issue was taken with the length of time it took for the Plaintiff to bring the motion. I do not find the delay to be such that it disqualifies the Plaintiff from an order made under this rule. In any event, the Plaintiff also relies on Rule 59.06 which allows the court to vary or set aside an order on the ground of fraud or facts arising after the order was made.
[7] I do not have sufficient evidence to conclude that Azeez’s conduct rises to the level of fraud, but the order and the motion giving rise to it were discovered after the fact. Certainly the inability of the Plaintiff to participate in the motion is highly prejudicial and led to the setting aside of a judgment previously obtained, and ignored the negotiated settlement with respect to the cost of redemption of 2230 Lakeshore. It is not in the interests of justice to allow an endorsement made in those circumstances to stand. I accept that no amount of diligence would have allowed the Plaintiff to become aware of the motion brought before Master Brott. I set aside her order of April 21, 2017 (as reflected in her endorsement) and reinstate Master Haberman’s judgment dated June 3, 2016.
[8] Second, having reinstated Master Haberman’s judgment, should I embark on the exercise of determining the appropriate redemption value in the face of executed and controversial Minutes of Settlement? I conclude that I should not. Before any such accounting exercise takes place, the parties must resolve whether or not the minutes executed by them are enforceable. This is a matter for a judge either by way of application, motion or other process that Asif and Azeez must decide upon. Until the enforceability of the minutes is resolved, there can be no determination of the redemption value of the mortgage. I also note that if a Master were to make such a determination, it would be done as a reference referred by a judge or the administrative Master on application by the parties. As such, I dismiss Asif’s cross-motion.
[9] To be clear, reinstating Master Haberman’s judgment does not necessarily deprive Asif/Azeez from seeking to cap the cost of redemption. Rather, I have concluded that the issue cannot be properly determined without first knowing the effect of the minutes. I have no jurisdiction to decide on the effect of the minutes, it being a substantive contractual issue more properly determined by application or summary judgment motion to a federally-appointed judge with inherent jurisdiction and the expanded fact-finding powers that may be necessary to resolve the issue. Once the enforceability of the minutes is decided, the issue is either resolved because it is governed by the minutes, or the parties can seek a reference on quantification.
[10] In the meantime, the Plaintiff shall not avail itself of any remedies with respect to possession or sale until further court order. If Asif/Azeez have not taken any steps to resolve the enforceability of the minutes either by way of settlement or court process to a judge by August 30, 2018, the Plaintiff shall be at liberty to exercise all rights available to it arising from Master Haberman’s judgment subject to limitations to possession that may arise from the applicability of the Residential Tenancies Act, 2006.
Costs:
[11] The Plaintiff had first brought this motion before me on an ex parte basis. I adjourned the motion and ordered the Plaintiff to notify Ms. Asif. The motion then came back before me On November 23, 2017 at which time there was some argument and an adjournment request by Azeez. The motion and Asif’s cross-motion was ultimately argued on March 29, 2018.
[12] The Plaintiff seeks costs of $18,151.05 on a partial indemnity scale or $26,650.53 on a substantial indemnity scale for the three motions without a breakdown of time spent on each. It argues that substantial indemnity against Azeez personally is warranted since it is his conduct that have increased costs and fees. The Plaintiff also provided a brief setting out correspondence between Azeez and Plaintiff’s counsel. Much of the discussion appeared to be about the redemption value of 2230 Lakeshore with Azeez adding the withdrawal of a small claims court proceedings and law society complaints to the bargaining table. Asif/Azeez assert that this amount is too high. He claims that he has spent about $12-13,000 on legal advice with respect to the motions.
[13] I can say that the amount of material for this motion is voluminous. In part this is because the Plaintiff was prepared to re-argue a motion for summary judgment if I did not set aside Master Brott’s order. There is, however, duplication of time and it is due to the Plaintiff’s choice of bringing such a controversial matter on an ex parte basis that caused costs to be thrown away on the first appearance. I also find the Plaintiff’s costs outline unhelpful in understanding how time was allocated to the work done. Azeez is not a lawyer and has acted as agent for Asif in the best way that he can. This can be frustrating but I do not find Azeez’s conduct so egregious to warrant heightened costs. This court does however frown on the threat or use of litigation or complaint to the law society as a bargaining tool. Given Azeez’s own expenditures on counsel, I find a reasonable quantum for costs to be $15,000 inclusive of disbursements and HST. The Plaintiff seek these costs, however, against Azeez and not Asif.
[14] Based on the record before me, I accept that it is Azeez who is the driving force and directing mind in this proceeding and that his wife Asif is a straw defendant. All correspondence has been with Azeez. It is Azeez who has sworn all of the affidavits. In those affidavits he discusses how much he has spent on legal fees, fees for maintaining the property and other expenses. It is Azeez who discusses the redemption value and it is Azeez who raises the issue of duress. In a nutshell, it is clear from the materials that it is Azeez who holds the purse strings and makes the decisions in this action against his wife.
[15] Given Azeez’s key role and admitted financial involvement with this property and mortgage action, it is appropriate to award partial indemnity costs against him as well as Asif as a party. In light of my broad discretion under Rule 57 and the factors therein, I award the Plaintiff partial indemnity costs of $15,000 inclusive of disbursements and HST payable jointly and severally by Azeez and Asif within 90 days of today’s date.