COURT FILE NO.: CV-18-3246-00
DATE: 2018 12 07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARY D’ATRI
Dennis Van Sickle for the Applicant
- and -
ROSEMARIE NATALIE DINADIS
Michael Dinadis, appearing as agent for the Respondent
HEARD: November 22, 2018
REASONS FOR DECISION
Emery J.
[1] The applicant Mary D’Atri is the mother of the respondent, Rosemarie Natalie Dinadis.
[2] Ms. D’Atri loaned $500,000 to Ms. Dinadis in the summer of 2015. Ms. D’Atri granted a mortgage to a bank to obtain the money she was lending to her daughter. Ms. Dinadis agreed to make the mortgage payments on that mortgage. She also agreed to pay the remaining balance on the mortgage when the term of the mortgage expired on June 20, 2020.
[3] Ms. Dinadis informed her mother on or about July 17, 2017 that she did not intend to make any further mortgage payments to the bank. She also told Ms. D’Atri that she would not repay the balance of the mortgage when it became due.
[4] Ms. D’Atri has made all mortgage payments since August 2017 to keep the mortgage in good standing. To date, she has made at least sixteen mortgage payments totalling approximately $32,000 that Ms. Dinadis was to pay. As of July 30, 2018, the principle balance on the mortgage equals $466,065.
Claim made by Application
[5] Ms. D’Atri commenced this application on August 2, 2018 to make her claim as she seeks judgment on the loan as quickly as possible.
[6] Ms. Dinadis was served with the application record on August 13, 2018.
[7] The application was before the court for the first time on August 24, 2018. Mr. K. Khak appeared on that occasion as counsel for the respondent Rosemarie Natalie Dinadis. Mr. Khak advised Justice Bloom that he had just been retained. Justice Bloom adjourned the application October 25, 2018 at the request of Mr. Khak to allow the preparation, service and filing of materials.
[8] On October 25, 2018, Justice McSweeney was informed by Mr. Dinadis, the husband of Rosemarie Natalie Dinadis who appeared as her agent, that the matrimonial home had been sold for $2 million dollars. Mr. Dinadis requested a further adjournment of the application. Mr. Van Sickle asked for judgment on behalf of Ms. D’Atri so that she could enforce it against the sale proceeds. Justice McSweeney declined to grant judgment because she heard submissions from Mr. Dinadis that the closing under the agreement of purchase and sale was flexible, but that the sale would not close before November 30, 2018. Justice McSweeney granted the adjournment requested by Mr. Dinadis to November 22, 2018 based on his assurance that the sale of the house would not close before that date.
No defence to the claim
[9] On November 22, 2018, Mr. Dinadis appeared again as agent for Rosemarie Natalie Dinadis, who did not appear. Mr. Dinadis requested an adjournment of this application on behalf of Ms. Dinadis, asking for more time to retain counsel and to file responding materials.
[10] For reasons given in court, I denied the adjournment request. Ms. Dinadis had been represented by counsel as early as August 24, 2018 when Justice Bloom adjourned the application for the preparation, service and filing of materials. No explanation was given why Ms. Dinadis is no longer represented by counsel. There was no explanation given why no responding materials have been filed by Ms. Dinadis.
[11] The application therefore proceeded on an uncontested basis. An application under Rule 14.05(3) should only be brought when permitted under the Rules or by statute. An application can be brought for those purposes set out under Rule 14.05(3), including but not limited to matters involving uncontested facts.
[12] In the absence of responding materials from Rosemarie Natalie Dinadis, I have only the evidence given on the application by Mary D’Atri to consider. The facts set out in the evidence of Mary D’Atri are as follows:
a) Ms. D’Atri is 82 years old. She is the mother of the respondent, Rosemarie Natalie Dinadis.
b) Mr. D’Atri made an interest free loan in the amount of $500,000 to Ms. Dinadis in June 2015 because Ms. Dinadis told her mother she desperately needed the money. She required the money to inject into the restaurant owned and operated by her husband.
c) Ms. D’Atri mortgaged her home to obtain the funds that she loaned to Ms. Dinadis.
d) Ms. D’Atri and Ms. Dinadis agreed as terms of the loan that Ms. Dinadis would make the monthly mortgage payments on the mortgage arranged against Ms. D’Atri’s home. They also agree that Ms. Dinadis would pay the balance of the mortgage when its term expired in June 2020.
e) Ms. Dinadis honoured the agreement for the first two years by making the required mortgage payments.
f) In July 2017, she told Ms. D’Atri that she refused to make any further mortgage payments. She also stated that she did not intend to repay the balance of the mortgage when it became due.
[13] Ms. Dinadis reneged on the loan agreement when she felt slighted by the size of a cash gift that Ms. D’Atri had given to her in 2016, compared with the size of the cash gift Ms. D’Atri had given to her other daughter. Ms. D’Atri gave $50,000 to Ms. Dinadis, and $150,000 to her other daughter because she had more children.
[14] There was no suggestion made by Mr. Dinadis that the $500,000 advanced by Ms. D’Atri in 2015 had been a gift. In fact, he stated at the hearing of the application that “If we could pay it off at the end, of course we would have.”
[15] Ms. D’Atri states in her affidavit that she has been making the monthly mortgage payments since August 2017. These payments total approximately $32,000. There was approximately $466,000 outstanding on the mortgage as of August 2018.
[16] Approximately six months after reneging on her agreement to make the mortgage payments, Ms. Dinadis told Ms. D’Atri that the restaurant for which she had obtained the loan in the first place had been sold. Ms. D’Atri only learned of the sale after the fact. Ms. Dinadis provided none of the sale proceeds from the restaurant to Ms. D’Atri to apply against the loan.
[17] In early 2018, Ms. Dinadis listed the home in Oakville that she owns jointly with her husband for the asking price of 2.7 million dollars. The encumbrances against that home amounted to approximately half that value. If the home sold for that price, the sale would generate sufficient net proceeds that would allow Ms. Dinadis to repay her loan to her mother.
[18] The Dinadis home was sold during the adjournment of this application. It sold for $2 million dollars, and closed on November 16, 2018. There is evidence from Magdalene Rossi, a legal assistant with the law firm of Keyser Mason Ball, LLP representing Ms. D’Atri, that after the payment of encumbrances against title, $600,000 should have been available to Ms. Dinadis from the sale to repay the loan to her mother.
Judgment
[19] Ms. D’Atri brings this application to obtain judgment for the balance of the mortgage outstanding against her home, plus the amount that she has paid to the bank after July 2017, for a total of $490,000. Ms. D’Atri further claims punitive damages in the amount of $50,000 for the behaviour and conduct of Ms. Dinadis. She submits punitive damages in that amount would be a fair and equitable amount as it represents the return of the cash gift she made to Ms. Dinadis in 2016.
[20] I find as a fact that Ms. D’Atri loaned $500,000 to Ms. Dinadis in June 2015. This transfer of funds was not a gift from mother to daughter. Ms. D’Atri granted a mortgage against her own home to obtain the funds from the bank that she advanced to Ms. Dinadis. Although there is no evidence in writing of the indebtedness, I find as a fact that as a term of this loan, Ms. Dinadis agreed to make the mortgage payments to the bank on the mortgage and to repay Ms. D’Atri the balance owing under the mortgage when the term expired in June 2020.
[21] I find as a fact on the evidence of Mary D’Atri that Ms. Dinadis informed her mother of her intention to make no further payments on the mortgage in July 2017. I find as a further fact that she told Ms. D’Atri she would not repay her the mortgage balance when it became due.
[22] Ms. Dinadis did not make further mortgage payments. She has therefore breached the loan agreement with her mother. I conclude that her declaration of intention and her failure to make mortgage payments constitutes anticipatory breach of the loan agreement, entitling Ms. D’Atri to make a claim for the accelerated repayment of the loan in full. See Spirent Communications of Ottawa Ltd. v. Quake Technologies (Canada) Inc., 2008 ONCA 92, 88 OR (3rd) 721 (Ont. C.A.). I also conclude that Ms. D’Atri is entitled to recover the mortgage payments she has made since her daughter breached the loan agreement.
[23] Even if I had not found that Ms. D’Atri and Ms. Dinadis had formed a loan agreement, I find there to be sufficient evidence that Ms. Dinadis has been unjustly enriched at the expense of Ms. D’Atri. There is no juristic reason or reasonable basis for that unjust enrichment. I would have found that Ms. D’Atri is entitled to restitution in the result for the payment of the current balance of the mortgage in the amount of $466,065, and to reimburse Ms. D’Atri for $32,000 for the mortgage payments she has made: Garland v. Consumers Gas Co., 2001 Carswell Ont. 4244 (Ont. C.C.).
[24] I do not consider there to be an independent wrong as required by the law to recover the punitive damages sought by Ms. D’Atri. An independent actionable wrong is required to find entitlement to punitive damages: Whiten v. Pilot Insurance Company, 2002 SCC 18. The gift made by Ms. D’Atri to Ms. Dinadis in the amount of $50,000 in 2016 was an unconditional gift. There is no basis to obtain its retrieval.
[25] Ms. Dinadis sold the restaurant in Oakville without paying any money back to her mother. She subsequently sold the matrimonial home in Oakville with her husband. However, neither sale is a sufficient basis to claim punitive damages. The sale of the restaurant or home was not a term of the loan agreement that would trigger the obligation to repay the money advanced. The courts have held that punitive damages may be awarded when compensatory damages are insufficient, such as in Fernandes v. Penn Corp. Life Insurance Co., 2014 ONCA 615 at para. 74. Ms. D’Atri is obtaining judgment for compensatory loss in this proceeding. Any compensation for Ms. Dinadis’ litigation conduct can be recovered in costs.
[26] Judgment is therefore granted to Mary D’Atri against Rosemarie Natalie Dinadis in the amount of $498,065, plus post judgment interest.
Costs
[27] Ms. D’Atri also seeks costs on a substantial indemnity basis. She seeks those costs fixed in the amount of $18,275 for fees based on time incurred by counsel, HST of $2,375.75, disbursements in the amount of $220 for non-taxable disbursements and $664.89 for taxable disbursements, for a total of $23,911.39.
[28] Ms. Dinadis used the intervening time after the breach to sell the restaurant for which she borrowed the $500,000 from her mother in the first place. She and Mr. Dinadis sold the matrimonial home prior to November 30, 2018, contrary to the submissions made by Mr. Dinadis to Justice McSweeney on October 25, 2018.
[29] Substantial indemnity or full recovery costs are generally not awarded unless the party seeking costs can persuade the court that the party against whom costs are sought has behaved in a reprehensible or egregious manner, or in such other manner deserving chastisement by the court. The court must consider these factors as the threshold for awarding costs at a higher level: Mortimer v. Cameron, 1993 568 (Ont. C.A.), reviewed with approval by the Court of Appeal in Davies v. Clarington (Municipality of), 2009 ONCA 722.
[30] I consider the conduct of the respondent Rosemarie Natalie Dinadis to have been egregious. I make this finding both with respect to her behaviour toward her mother, and with respect to her conduct in the course of this application.
[31] I have reviewed the Bill of Costs submitted on behalf of Ms. D’Atri, and I find the costs claimed to be reasonable. Mary D’Atri is therefore awarded costs on a substantial indemnity basis for this application, fixed in the amount of $23,000 all inclusive. These costs are payable forthwith by the respondent Rosemarie Natalie Dinadis.
Emery J.
Released: December 7, 2018
COURT FILE NO.: CV-18-3246-00
DATE: 2018 12 07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E N:
MARY D’ATRI
- and -
ROSEMARIE NATALIE DINADIS
REASONS FOR DECISION
Emery J.
Released: December 7, 2018