COURT FILE NO.: CV 18 1007 DATE: 20180706 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: AMA Investments Inc. v. Peace Okpara and Christopher DeRose
BEFORE: TZIMAS, J.
COUNSEL: Paul H. Mand, for the Plaintiff Peace Okpara and Christopher DeRose, in person for the Defendants
HEARD: July 5, 2018
ENDORSEMENT
INTRODUCTION
[1] The Plaintiff, AMA Investments Inc. brought a motion for summary judgment against the defendants Peace Okpara and Christopher DeRose. They seek judgment in the sum of $323,278.35 on account of a mortgage default by the defendants.
[2] The plaintiff says that the only issue for consideration is whether there is any genuine issue requiring a trial. The plaintiff says that there is no genuine issue.
[3] The defendants do not dispute the default. They take issue with the accounting and specifically with the claim for compound interest and the claim for a post-maturity fee. They also allege that the genuine issue for trial is the allegation that the plaintiff’s counsel, Mr. Paul Mand deliberately sabotaged their efforts to obtain a refinancing loan from another lender that would have enabled them to cure their debt.
[4] For the reasons that follow I have concluded that it is appropriate that a judgment be granted in favour of the plaintiff as against the defendants in the sum of $313,736.45 plus costs of $12,000, which are to be inclusive of disbursements and applicable taxes.
EVIDENCE
[5] The loan agreement between the parties is not in dispute. On November 1, 2016, the defendant Peace Okpara borrowed $260,000 from the plaintiff and secured it by granting a charge over the property municipally known as 30 Magnificent Court, Brampton, Ontario, L6P 2T2. She increased the loan to $271,450. The interest on the mortgage was set at 12.99 per annum. The co-defendant, Christopher DeRose guaranteed the loan. The loan matured on July 22, 2017. Default in the payment of principal and interest occurred on August 1, 2017 and continues to date.
[6] The defendants tried to obtain financing to address their debt. The motion for summary judgment was first before the court on June 14. On that date, Mr. DeRose advised the court that his lawyer was in funds and that the financing arrangement would close that afternoon. The motion was adjourned on the view that if the funding came through there would be no need for a judgment.
[7] The events that followed that afternoon is what gives rise to the defendants’ argument. Mr. DeRose alleges that immediately upon leaving the courthouse, his mortgage broker contacted him to advise that the lenders had changed their minds and that the deal would not close that afternoon. He said that he learned from the mortgage broker that Mr. Mand called the lenders’ lawyer, Mr. Harvey Spring, to advise him of the defendants’ default on his own clients’ loan and to caution him against the new proposed arrangements. Mr. Mand also provided Mr. Spring a copy of the most recent accounting statement outlining the amount owing under the Charge as of May 15, 2018.
[8] Mr. DeRose further alleges that Mr. Mand was deliberate in his actions and sought to undermine the defendants’ transaction because this would augment his legal fees. He acknowledged that any interference with the financing would interfere with Mr. Mand’s own clients’ interests but he argued that Mr. Mand put his own interests ahead of his own clients’ interests. In support of that contention he explained that Mr. Mand was never prepared to co-operate on the subject of the re-financing and was not prepared to give an undertaking that the charge on the defendants’ property would be discharged upon receipt of the funds.
[9] Finally, with respect to his original representation to Ricchetti J. that his lawyer already had the funds, Mr. DeRose said that “the lawyer” meant the lender’s lawyer and not his lawyer. He said that he did not actually know if his own lawyer, Ms. Abimbola had received the funds from Mr. Spring.
[10] Mr. Mand offered the court a very different version of events. He agreed that everyone attended on June 14 before Justice Ricchetti and that Mr. DeRose was clear that his lawyer had received the funds and that the refinancing would close that afternoon.
[11] Mr. Mand wrote to Mr. DeRose’s counsel, Ms. Abimbola and copied Mr. Spring at 11:52 a.m. on June 14, 2018. His communication said the following:
All
Mr. Christopher De Rose appeared in court today and advised the judge that his lawyer was in funds already and our mortgage would be paid out today. May I please have confirmation of this? We have been waiting patiently for discharge funds.
Is this refinancing closing?
PM
[12] At 12:04 p.m. Mr. Spring responded with the following message:
I have been instructed not to close the transaction.
Harvey Spring
[13] At 4:43 p.m. Mr. Spring wrote to Mr. Mand and asked for the following:
Hi Paul:
Please provide me the following information:
- When did your client’s mortgage mature?
- Have any payments been made since the maturity date?
- What was the approximate date on which your client last received any payment?
[14] Mr. Mand forwarded the communication to Mr. DeRose’s counsel at 4:55 p.m. and suggested that she should be the one to respond to his inquiries. He also attached an accounting statement that provided the answers to Mr. Spring’s questions. Ms. Animbola responded the following message at 5:05 p.m.:
Not able to open your attachment. However, the email was addressed to you not me. Please respond as directed.
Taiwo O. Abimbola
[15] Following Ms. Abimbola’s direction, Mr. Mand wrote to Mr. Spring the following:
Harvey
Ms. Ambimbola
Has instructed me to answer your questions. I have enclosed a statement which will disclose all the answers to your questions.
PM
[16] With respect to his co-operation over the issue of the refinancing arrangements and the discharge of the mortgage, Mr. Mand explained that the refinancing would not have been adequate to satisfy the full debt. He told Ms. Aminbola that there would be no discharge but only a postponement. He asked to have her lender register a Charge and he in turn would prepare a postponement upon receipt of the new Charge.
[17] Moreover, in the days leading up to June 14, Mr. Mand had various exchanges with Ms. Aminbola about how to structure the various charges on the property. He suggested a four-way DRA between all the parties with the following registrations to occur simultaneously:
- Registration of the New Second Mortgage
- Registration of the Notice Amending Agreement – amending the existing third mortgage
- Postponement of the Existing Second Mortgage to the New Second Mortgage
- Postponement of the Exiting Third Mortgage to the New Second mortgage.
[18] He concluded the proposal with the indication that upon execution of the DRA his clients would message their postponement and once in receipt of the funds they would sign-off on the postponement and have it registered. Mr. Mand offered to prepare the DRA for a fee of $500 but Ms. Aminbola found that too expensive.
ANALYSIS AND FINDINGS
[19] In my review of the evidence and the parties’ respective submissions I see no genuine issue for trial. The allegations against Mr. Mand are entirely unfounded. All of the communications that were put before the court support a finding that Mr. Mand was firm and professional in his representation of his clients’ interests. He was very careful in his communications with Mr. Spring and indeed, when Mr. Spring asked the questions about the defendants’ past payment obligations, Mr. Mand turned to Mr. DeRose’s counsel and gave her the opportunity to take over the conversation. Had he been engaged in any sinister attempt to sabotage the defendants’ efforts to obtain new financing, he would not have said anything to Ms. Aminbola about his communication with Mr. Spring.
[20] The suggestion that Mr. Mand would seek to actively sabotage the defendants’ efforts to refinance and therefore to pay their debts was preposterous for the reason that the net loser would be Mr. Mand’s clients. The suggestion by Mr. DeRose that Mr. Mand would undermine his own client’s interest merely to drive up his legal fees made no sense. Mr. Mand already signaled to Mr. DeRose that his client would be prepared to accept something less than the full debt obligation to bring the matter to a conclusion.
[21] Against those allegations, the evidence before the court reveals bona fides proposals by Mr. Mand to work with the defendants towards some resolution that would respond to his client’s claim and the defendants’ interest to refinance their debt.
[22] The only other outstanding issue concerns the claim for a “Post Maturity Fee” of $8,815.34. There is no reference to such a fee in the Loan Agreement. There is a reference to a $350.00/day fee for every day that the principal is not paid. This seems to be a different sum from the claimed sum. I see no basis for the claim of this specific sum.
[23] Accordingly, with the exclusion of the “Post Maturity Fee” and the application of single interest, the outstanding sum as of July 5, 2018 is $313,736.45. Judgment is to issue in favour of the plaintiff in the sum of $313,736.45.
[24] With respect to costs, Mr. Mand’s Bill of Costs is reasonable. Having regard for the plaintiff’s entitlement to full indemnity and the fact that Mr. Mand attended in court on 4 separate occasions, costs fixed at $12,000 inclusive of interest and applicable taxes is reasonable and I fix them accordingly.
[25] A judgment order is to issue in accordance with the draft judgment which I have reviewed and approved.
Tzimas J