Court File and Parties

Chatham Court File No.: CV-19-00267 Date: 2019-05-02 Ontario Superior Court of Justice

Between: William Grantmyre and Rivard’s Sawmill Builders’ Supply Co. Limited, Applicants – and – The Bank of Nova Scotia, Respondent

Counsel: William Grantmyre, acting in person Brent K. Harasym, for the Defendant

Heard: January 4 and 29, 2019

Reasons for Order

Howard J.

Overview

[1] This application involves a property municipally known as 22500 Creek Road, R.R. No. 3, Chatham, Ontario (the “Property”), the legal description of which is as follows:

PT LT 4 CON 3 WESTERN BOUNDARY RIVER THAMES SURVEY HARWICH AS IN 664113; SUBJECT TO AN EASEMENT AS IN 66413; MUNICIPALITY OF CHATHAM-KENT PIN: 00893-0040 (LT)

and

PT LT 4 CON 3 WESTERN BOUNDARY RIVER THAMES SURVEY HARWICH PT 5, 24R5472; T/W 580279; CHATHAM-KENT

PIN: 00893-0202 (LT)

[2] As such, it will be seen that the Property consists of two parcels of land, each bearing a separate Property Identification Number (“PIN”). The first parcel is a large, five-sided parcel that fronts onto Creek Road. The second parcel is a small, triangular parcel that is located in the southwest corner of the Property, and which does not have any frontage on Creek Road.

[3] At the centre of the dispute is a mortgage that was registered on title to the Property in favour of the respondent, the Bank of Nova Scotia (“BNS” or the “Bank”), in November 2011, and the subsequent proceedings that were commenced by BNS to enforce its mortgage.

[4] Neither of the applicants is a party to the mortgage.

[5] The applicant William Grantmyre maintains that he is the sole registered owner of the Property and that he never received notice of the mortgage enforcement proceedings.

[6] It is common ground that in furtherance of the mortgage enforcement proceedings, on October 1, 2018, the Bank entered into an agreement of purchase and sale under power of sale with a third-party purchaser for the sale of the Property, which transaction was initially scheduled to close on January 4, 2019.

[7] On January 3, 2019, Mr. Grantmyre brought an emergency motion for an interim injunction seeking to restrain the Bank from selling the Property pursuant to the mortgage enforcement proceedings. The motion was originally brought on an ex parte basis and was returnable on January 4, 2019. However, it is common ground that Mr. Grantmyre did in fact give notice to BNS of the motion on January 3, 2019.

[8] Mr. Grantmyre seeks the opportunity to purchase the property from the Bank at the same price that it accepted from the third-party purchaser in October 2018 “or the opportunity to discharge [the Mortgage] through the financing I’ve already arranged.”

[9] Argument on the emergency injunction motion commenced before me on January 4, 2019. Counsel for BNS appeared on that date and filed a responding motion record. Counsel for the Bank also advised me that the sale of the Property to the third-party purchaser under the agreement of purchase and sale dated October 1, 2018, was not ready to close on January 4th, as scheduled.

[10] In the result, the hearing of the injunction motion was adjourned to January 29, 2019, to permit the parties to file supplementary affidavits, conduct cross-examinations on the affidavits, and deliver factums on the motion. In my handwritten endorsement of January 4th, I ordered that “pending the return of the motion or further order of the court, there shall be an interim, interlocutory injunction issued on a without prejudice basis restraining the sale of the subject property.”

[11] The hearing resumed on January 29, 2019, and argument on the motion was concluded that day. In the course of his submissions, counsel for BNS advised me that the closing of the transaction for the sale of the Property, which was to have closed on January 4th, had been subsequently extended to February 5, 2019.

[12] Accordingly, at the conclusion of the argument before me on January 29th, I advised the parties that I would make best efforts to provide them with at least some notice of the outcome of my decision by February 5, 2019.

[13] To that end, by letter dated February 4, 2019, sent by email to Mr. Grantmyre and counsel for the Bank, I advised the parties that Mr. Grantmyre’s motion for the interim injunction restraining the sale of the Property was dismissed and, for greater certainty, the interim without prejudice injunction that had been issued on January 4th was dissolved.

[14] I also advised the parties that I would subsequently release written reasons in my decision. These are the reasons.

Factual Background

[15] From a review of the parcel register for the Property, it appears that as of the date of the Property’s conversion into the Land Titles system on October 25, 2010, the registered owner of the Property was the corporate applicant, Rivard’s Sawmill Builders’ Supply Co. Limited (the “Rivard’s Sawmill”).

[16] Mr. Grantmyre is the principal of Rivard’s Sawmill. He serves as the company’s president, secretary, and director. The evidence of Mr. Grantmyre is that he purchased all the shares of Rivard’s Sawmill in or about July 2011. His evidence is that Rivard’s Sawmill has operated on the Property since 1947.

[17] On November 10, 2011, the Property was transferred from Rivard’s Sawmill to one Doris Inge Giesbrecht. The parcel register indicates that the amount of the consideration for the transfer was $385,000.

[18] On or about November 25, 2011, Ms. Giesbrecht obtained a mortgage from BNS in order to secure the purchase price of $385,000. On November 25, 2011, the charge/mortgage was registered on title to the Property as instrument no. CK65276 (the “Mortgage”). I note that in the charge/mortgage document evidencing the Mortgage, Ms. Giesbrecht stated that: “I am not a spouse.” Ms. Giesbrecht was represented by a solicitor for the purposes of the mortgage financing, who registered the Mortgage on her behalf.

[19] The Mortgage contained standard charge terms that provided that on default of payment of any sum required to be paid under the Mortgage, the principal would become due and payable, and BNS would be entitled to possession of the Property.

[20] Ms. Giesbrecht defaulted on the Mortgage on or about May 1, 2016.

[21] Some six months later, on October 20, 2016, BNS caused a statement of claim to be issued by the local registrar in St. Catharines, Ontario, to enforce the Mortgage. To that end, in its statement of claim, the Bank claimed, inter alia , possession of the Property, payment of the amount of $276,765.74 due under the Mortgage, and payment of the sum of $4,103.25 for property taxes that had been paid by the Bank in respect of the Property (the “Mortgage Action”).

[22] On November 15, 2016, Ms. Giesbrecht was properly served with the statement of claim by personal service effected at the 22500 Creek Road address. Ms. Giesbrecht verbally acknowledged to the process server that she was Doris Giesbrecht.

[23] Ms. Giesbrecht took no steps to defend the Mortgage Action.

[24] Accordingly, BNS then undertook steps to obtain a default judgment in the Mortgage Action.

[25] On January 5, 2017, the solicitors for the Bank obtained and reviewed a parcel register for the Property. The parcel register indicated that Ms. Giesbrecht was the registered owner of the Property and that, other than the Mortgage, there was no other interest registered on title to the Property. However, the Property was subject to two writs of execution, one in favour of the law firm who had acted for Ms. Giesbrecht on the Mortgage financing, and the other in favour of an entity called Morbank Financial Inc.

[26] Further to their review of title, on January 5, 2017, the solicitors for BNS prepared and delivered a “notice of sale under mortgage” to all persons who appeared to have an interest in the Property (the “Notice of Sale”). The Notice of Sale provided, inter alia , that if payment in the amount of $298,115.14 was not made by February 14, 2017, the Bank “shall sell” the Property. The February 14, 2017, date is significant, and I return to it below.

[27] The Notice of Sale was delivered by registered mail to:

a. Ms. Giesbrecht; b. the “Spouse of Doris Inge Giesbrecht”; c. Mr. Bruce P. Mitchell of the Mitchell & Mitchell law firm, who had acted for Ms. Giesbrecht on the Mortgage financing; d. Morbank Financial Inc.; and e. Mr. Wade W. Sarasin of the Siskinds LLP law firm, who were the solicitors for Morbank Financial Inc.

[28] Ms. Giesbrecht made no payment on the Mortgage prior to the February 14th date cited in the Notice of Sale.

[29] Rather, on February 15, 2017, Ms. Giesbrecht transferred title to the Property to Mr. Grantmyre. I note the following about the transfer registered on title:

a. The transfer indicates that the transaction was effected for the nominal consideration of only two dollars. b. In the transfer, Ms. Giesbrecht stated that: “WILLIAM GRANTMYRE and I are spouses of one another and are both parties to this document.” c. The address for the transferor Ms. Giesbrecht listed on the transfer is the 22500 Creek Road address, and that same address is shown as the address for the transferee Mr. Grantmyre. d. The transfer was prepared and signed by a solicitor, who stated that he was the solicitor for the transferor and the transferee, “and this transfer is being completed in accordance with my professional standards.”

[30] It is clear that the transfer was registered without the knowledge or consent of the Bank, and in the face of the Mortgage Action and the Notice of Sale, both of which had been previously served on Ms. Giesbrecht.

[31] It is to be noted that whereas the Notice of Sale served on Ms. Giesbrecht stated that the Bank “shall sell” the Property if payment was not made by February 14, 2017, it was the very next day, on February 15th, when Ms. Giesbrecht transferred title to Mr. Grantmyre.

[32] In cross-examination, Mr. Grantmyre admitted that as of the date when legal title to the Property was transferred to him in February 2017:

a. he knew that the Mortgage to BNS was registered on title; b. he knew that title to the Property was subject to the two executions; c. he took title to the Property subject to those executions; d. he knew that the mortgage debt to BNS had not been paid out; e. he did not discharge the Mortgage prior to the transfer; f. he did not take steps to assume the Mortgage so that he would be responsible for the mortgage payments; g. he acquired the Property, with the Mortgage remaining on title with BNS as the first mortgagee, with the intent of refinancing the debt to BNS and discharging the Mortgage; h. he did not advise the Bank prior to the transfer that he was taking title to the Property; i. he did not advise the Bank after the transfer that he had taken title to the Property; and j. it is fair to say that insofar as the Bank was aware, he was not on title to the Property.

[33] In para. 5 of this affidavit, and in cross-examination, Mr. Grantmyre denied that he is or was the spouse of Ms. Giesbrecht or that they are related parties of one another. He testified that he knew Ms. Giesbrecht prior to the transfer of the Property to him in 2017; he believed he had known her for five years. He acknowledged that the lawyer who prepared the transfer in which Ms. Giesbrecht stated she and Mr. Grantmyre were spouses prepared the document based on information that he was given by Ms. Giesbrecht and Mr. Grantmyre; however, he maintains that there was a “typo” in the transfer document, in that, the lawyer failed to insert the word “not” in Ms. Giesbrecht’s statement about being the spouse of Mr. Grantmyre.

[34] In cross-examination, Mr. Grantmyre also acknowledged that he did not purchase the Property for “full valuable consideration.” He testified that he did not recall whether he paid land transfer tax based on the full value of the property. In the same vein, he testified that he did not recall whether the land transfer tax that he did pay was based on the two-dollar, nominal consideration set out in the transfer.

[35] In my view, the only reasonable inference to be drawn from the evidence is that the transfer of title to the Property from Ms. Giesbrecht to Mr. Grantmyre on February 15, 2017, was effected in an attempt to evade an unfavourable outcome in the Mortgage Action and defeat the rights of the Bank under the Mortgage.

[36] On March 3, 2017, the Bank obtained default judgment in the Mortgage Action, as no payment had been made to BNS either before or after the transfer to Mr. Grantmyre, of which the Bank was unaware. The default judgment granted BNS possession of the Property and ordered payment in the amount of $296,636.77, plus $1,129.12 for costs.

[37] On March 22, 2017, the solicitors for the Bank delivered, by registered mail, a copy of the default judgment and a “Notice Demanding Possession” to Ms. Giesbrecht and Mr. Grantmyre at the 22500 Creek Road address.

[38] No payment was made to satisfy the default judgment.

[39] After obtaining the default judgment, the Bank retained a property management company, Veranova Properties Limited (“Veranova”), to manage the Property and, in particular, to attend at the Property from time to time in order to conduct occupancy inspections. The purpose of an occupancy inspection on a property that is the subject of mortgage enforcement proceedings is to determine if the property is vacant or occupied. If the property is occupied, the inspectors attempt to determine if the occupants own the property or are renting it, and how many people over the age of 18 years are residing on the property. The inspectors also make efforts to secure the property and prepare occupancy reports.

[40] On April 18, 2017, an occupancy inspection was conducted at the Property by Mr. Richard Bechard, a property manager employed by Veranova. Mr. Bechard swore an affidavit that was filed in support of the Bank’s position.

[41] The evidence of Mr. Bechard was that at the material times, the Property was being used as a mixed-use industrial and residential property. There was a one-and-a-half-storey brick and vinyl-clad residence and “a former sawmill operation” situate on the Property.

[42] The evidence of Mr. Bechard was that when he attended at the Property on April 18, 2017, he found that the Property was occupied, and he had dealings with an occupant who identified himself to Mr. Bechard as “John Wall.” The evidence of Mr. Bechard was that this “John Wall” advised Mr. Bechard that he was renting the Property from the owner and that “he was paying rent to her.”

[43] On May 13, 2017, Mr. Bechard served the tenants with a notice of attornment of rent, which required that as of June 1, 2017, all future rental payments were payable to the Bank and directed that all such payments were to be made to Daniel & Partners LLP , solicitors for BNS. The notice of attornment was placed under the door of the residence on the Property.

[44] On May 22, 2017, the purported tenant “John Wall” and his spouse “Betty Wall” signed a “Tenants’ Acknowledgement to Mortgagee as to Terms of Tenancy Agreement” form. Pursuant to this acknowledgement form, “John Wall” represented to the Bank that he was the tenant occupying the Property under a lease with Ms. Giesbrecht, that his wife “Elizabeth (Betty) Wall” was the only person over 18 years of age occupying the Property with him, that their rent was $800 per month, and that they moved in on March 1, 2017. The acknowledgement form was signed by “John Wall” as tenant, and by “Betty Wall” as witness to her husband’s signature.

[45] The acknowledgement form listed the contact phone number of the purported tenant “John Wall” as 780-263-0651, which is the cell phone number of Mr. Grantmyre. On cross-examination, Mr. Grantmyre admitted that if one were to call that number, they would not reach “John Wall.”

[46] The evidence indicates that, at least initially, the purported tenant “John Wall” made a lump sum payment of three months’ rent to Daniel & Partners LLP , solicitors for BNS, as directed by the notice of attornment of rent, but thereafter he proceeded to make his rent payments to Mr. Grantmyre, as of at least February 2018.

[47] The evidence of Mr. Grantmyre on cross-examination was that “John Wall” moved in as of mid-November 2017, and that he stopped paying rent to Mr. Grantmyre as of September 2018, but that up until that point “John Wall” was paying rent to Mr. Grantmyre. Mr. Grantmyre acknowledged that to the extent that “John Wall” was paying rent to Mr. Grantmyre, the purported tenant would not have also been paying rent to Daniel & Partners LLP , on behalf of BNS. Mr. Grantmyre further admitted that he did not pass on to BNS any rent moneys that he received from the purported tenants.

[48] On February 3, 2018, Mr. Bechard served the tenant with a notice of termination of tenancy for non-payment of rent. The evidence of Mr. Bechard was that the notice was served in order to commence eviction proceedings before the Ontario Landlord and Tenant Board, and that at that time, the tenant “still purported to be John Wall and indicated that he was paying rent to the owner.”

[49] By order of Lococo J. dated June 1, 2018, BNS obtained an order granting the Bank a writ of possession of the Property. On June 8, 2018, the Bank obtained a writ of possession of the Property. The writ of possession was sent to the Sheriff of the Municipality of Chatham-Kent on July 17, 2018.

[50] The Property was listed for sale in or about September 2018.

[51] As referenced above, on October 1, 2018, BNS entered into an agreement of purchase and sale under power of sale with a third-party purchaser for the sale of the Property. The identity of the third-party purchaser has not been disclosed in the documents filed with the court on the instant motion in order to protect the identity of, and other confidential information concerning, the said purchaser.

[52] As well, on October 1, 2018, Mr. Bechard provided the purported tenant with an “N-12” notice of termination of tenancy because the landlord or purchaser required the rental unit, advising the tenant that he had 60 days to vacate the Property. The N-12 notice was addressed to “John Wall” and all other occupants of the Property. The N-12 notice was issued because BNS had entered into the agreement of purchase and sale of the Property to the said third-party purchaser.

[53] On November 28, 2018, it so happened that court staff in the Windsor courthouse referred to me a motion that had been filed by Mr. Grantmyre on an emergency basis in a separate proceeding that had been commenced in Windsor (court file no. CV-18-27157). That emergency motion had been brought by Mr. Grantmyre seeking interim injunctive relief against BNS on an ex parte basis in the same terms as are presently sought against BNS in the instant proceeding.

[54] In my endorsement of November 28, 2018, I indicated that I was not satisfied that the motion presented was a case of “extraordinary urgency” within the meaning of the jurisprudence so as to justify an ex parte hearing in the absence of the Bank. I therefore ordered that the motion materials of Mr. Grantmyre should be served on BNS, and that the motion should return to court, on notice to the Bank, on November 29, 2018, at 2:00 p.m.

[55] The record indicates that on the return of Mr. Grantmyre’s motion in Windsor before Carey J. on November 29th, the emergency injunction motion was withdrawn without costs. The proceeding in Windsor was subsequently discontinued.

[56] The evidence indicates that as of December 19, 2018, the Property was vacant. By this time, all of the locks on the residential portion of the Property had been changed, and the gates to the commercial portion of the Property had been chained.

[57] The evidence of Mr. Bechard indicates that he attended at the Property on December 21, 2018, at approximately 4:00 p.m., in order to secure the Property and to change the locks. As of that date, it was 20 days after the deadline given to the tenants to vacate the Property. At that time, Mr. Bechard put a chain and lock on the gate to the Property. Mr. Bechard also posted signs on the windows of the buildings on the Property, including the notice to tenants, providing his name and telephone number in order for the tenants to contact him to make arrangements to remove the remainder of their personal property.

[58] Further, the evidence of Mr. Bechard was that he attended the Property again on December 24, 2018, when he discovered that the chain and lock to the Property that he had previously installed had been cut. Mr. Bechard noted that the main store room in one of the industrial buildings of Rivard’s Sawmill had been broken into, and all the signs that he had previously posted on December 21st had been removed. Mr. Bechard secured the Property and then left.

[59] However, the evidence further indicates that on or about December 29, 2018, and then again on December 31, 2018, Mr. Grantmyre attended at the Property and attempted to gain access.

[60] As referenced above, on January 3, 2019, Mr. Grantmyre filed the instant motion seeking an interim injunction restraining the Bank from selling the Property to the third-party purchasers pursuant to the Notice of Sale and the subsequent agreement of purchase and sale with the said purchasers dated October 1, 2018.

[61] Mr. Grantmyre brought the motion in advance of commencing any legal proceeding against BNS by some originating process. Of course, rule 37.17 of the Rules of Civil Procedure provides that in an urgent case, a motion may be made before the commencement of a proceeding on the moving party’s undertaking to commence the proceeding forthwith. In my endorsement of January 4, 2019, I ordered that Mr. Grantmyre would have his statement of claim issued and served on or before Wednesday, January 9, 2019. At that point, it was common ground that Mr. Grantmyre would be commencing an action.

[62] In the result, however, Mr. Grantmyre commenced an application. The notice of application was issued on January 9, 2019. In their prayer for relief, the applicants seek, inter alia , an order requiring BNS to discharge the Mortgage, a declaration that BNS was required to serve the applicants with its statement of claim in the Mortgage Action, a declaration that BNS was required to serve the applicants with a writ of possession, and an order granting the applicants possession of the Property.

[63] The notice of application does not, however, advance a claim for an interim or interlocutory injunction. While this omission was raised in the respondent’s factum, it was not pressed in oral argument. In the circumstances, I would not have the issues argued before the court determined on that narrow procedural point. I would grant leave nunc pro tunc to have the motion heard and determined on its merits despite the fact that there is no claim for an interlocutory injunction in the notice of application.

[64] I also grant leave nunc pro tunc to Mr. Grantmyre, pursuant to subrule 15.01(2), to represent the corporate applicant for the purposes of the instant motion only.

Issues

[65] In my view, the only real issue that requires determination on the motion before the court is whether the applicants are entitled to an interlocutory injunction restraining BNS from selling or transferring the Property?

Analysis

The evidence of Mr. Grantmyre

[66] Before I engage in an analysis of the issues on their merits, I would first say something about the evidence offered by Mr. Grantmyre on this motion. In short, I have certain concerns regarding the reliability if not the credibility of Mr. Grantmyre’s evidence.

[67] One area of concern involves the relationship between Mr. Grantmyre and Ms. Giesbrecht. On the one hand, the court is presented with an affidavit from Mr. Grantmyre in which he deposes under oath that he and Ms. Giesbrecht are not spouses or related parties of one another. However, that affidavit attaches as an exhibit the transfer of February 15, 2017, upon which Mr. Grantmyre very much relies in this proceeding, in which Ms. Giesbrecht states that she and Mr. Grantmyre are spouses. That transfer was prepared by a lawyer, who received the relevant information from Mr. Grantmyre and Ms. Giesbrecht.

[68] Mr. Grantmyre explains the inconsistency by saying that the lawyer who prepared the transfer made a “typo” or error in the preparation of the document.

[69] At the same time, when Mr. Grantmyre first brought his emergency motion in the context of the Windsor proceeding, he delivered an affidavit sworn by him on November 28, 2018, (a copy of which is found in the responding motion record), and in para. 4 of that affidavit, Mr. Grantmyre deposes under oath that: “Ms. Giesbrecht and I are spouses of one another.”

[70] Mr. Grantmyre explains the inconsistency by saying that the lawyer who prepared the 2018 affidavit made a “typo” or error in the preparation of the document. I note that the lawyer who produced the 2018 affidavit is not the same lawyer who prepared the 2017 transfer. In any event, one would expect that Mr. Grantmyre read his affidavit carefully before he actually signed it and, as such, no lawyer’s “typo” explains why such a basic fact would not have been caught upon Mr. Grantmyre’s review.

[71] Of course, if in fact Mr. Grantmyre and Ms. Giesbrecht are or were spouses at the material time, as Ms. Giesbrecht stated in the 2017 transfer and Mr. Grantmyre swore in the 2018 affidavit, then that would explain the nominal consideration of two dollars set out in the 2017 transfer.

[72] But if Mr. Grantmyre and Ms. Giesbrecht are or were not spouses or related persons, as Mr. Grantmyre adamantly maintains on this proceeding, then the nominal consideration is difficult to understand. Further, in that event, there arises the question of whether Mr. Grantmyre as purchaser paid the correct amount of land transfer tax in respect of the 2017 transfer of the Property between two supposedly non-related parties.

[73] On cross-examination, Mr. Grantmyre said that he could not “recall” whether he paid land transfer tax based on the full value of the property or whether the land transfer tax that he did pay was based on the two-dollar, nominal consideration set out in the transfer.

[74] Moreover, when the motion first came on for hearing on January 4th, I had a discussion with Mr. Grantmyre and counsel for the Bank about my concerns regarding the limited state of the evidentiary record. As I indicated at the time, there were some just basic facts of the matter that were not clear from the record. One of the express reasons – indeed, the primary reason – for the adjournment of the hearing until January 29th was to give both parties a further opportunity to file supplementary affidavits to address the concerns I had raised with them. Moreover, one of the specific questions I raised with Mr. Grantmyre at the hearing on January 4th was his relationship with Ms. Giesbrecht. My endorsement of January 4th, as discussed with the parties that date, gave Mr. Grantmyre until January 11, 2019, to deliver his supplementary affidavit. And I understood from Mr. Grantmyre’s comments at the time that he would be filing a further affidavit, as he assured the court that “we will have that information ready.”

[75] However, Mr. Grantmyre filed no supplementary affidavit.

[76] Given that Mr. Grantmyre knew that the court had a concern about his relationship with Ms. Giesbrecht – because I had expressly raised it with him – I would have thought that it would have been a relatively easy matter for him to address the court’s concern. To the extent that Mr. Grantmyre advised the court that he has been “happily married for 36 years to the same woman, and her name is Mary,” presumably it would have been a simple matter to, say, attach a copy of the marriage certificate to a further affidavit in order to put the question to rest.

[77] But that did not happen.

[78] Accordingly, I am left with the same concerns as I expressed at the January 4th hearing – except that those concerns have now been heightened.

[79] Another concern with Mr. Grantmyre’s evidence arises out of the affidavit of Mr. Bechard, the property manager employed by Veranova. The evidence of Mr. Bechard was that, as referenced above, he conducted several occupancy inspections of the Property on behalf of BNS and each time he was met by the same tenant. “Each time, he told me his name was John Wall and that he was paying rent to the owner.”

[80] In December 2018, Mr. Bechard received information from the third-party purchaser of the Property under the October 2018 agreement of purchase and sale that the tenant who had represented himself to Mr. Bechard to be “John Wall” was actually Mr. Grantmyre. In that regard, I note the following passages from Mr. Bechard’s affidavit:

In or about December of 2018, I was advised by the purchaser of the Property that the tenant who had purported to be John Wall was actually the Applicant, William Grantmyre. I requested photo identification from the tenant. He showed me a photograph of a driver’s licence that was issued to John Wall. It did not look anything like the person who was in front of me. I commented that the picture did not look anything like the person, to which he responded that he had lost weight. He refused to show me any original documents.

Later in December, I attended the property and the tenant was moving some of his belongings. He was using movers. I asked one of the movers where the “boss” was and they referred to him as “Bill” and not “John.”

On December 31, 2018, I was instructed by Veranova to check on the Property. I was told to call the police if the tenant was on the Property. I attended the Property and the tenant, the person who had held himself out to be John Wall, was there, although it appeared that he had just arrived. He was just exiting a vehicle when I arrived. I spoke with him and he admitted that he had broken into the Property and that he was suing everyone, that he would have an ex-parte order by the end of the day and that once he had the Order, if I returned to the Property he would call the police.

I confronted him about being William Grantmyre on December 31, 2018. He neither admitted nor denied this fact. He kept saying that he was John Wall and then said that his name was not relevant.

On or about January 4, 2019, I attended the Superior Court of Justice in Chatham, Ontario. A motion had been brought by Mr. Grantmyre. When I entered the courtroom, I saw the person who had held himself out to me as being John Wall, representing to the lawyer for BNS, the Court staff and the Judge that he was William Grantmyre.

I verily believe that John Wall and William Grantmyre are one and the same person.

[81] Mr. Grantmyre did not seek to cross-examine Mr. Bechard on his affidavit. Indeed, Mr. Grantmyre did not conduct any cross-examinations at all.

[82] On his cross-examination, Mr. Grantmyre was asked if he had any comment on para. 18 of Mr. Bechard’s affidavit, quoted above, regarding his attendance in court on January 4, 2019, and seeing the man who had held himself out to Mr. Bechard as being John Wall. Mr. Grantmyre replied: “None whatsoever, other than he’s made an error.” When Mr. Grantmyre was asked whether he had any contact information for Mr. Wall, he answered in the affirmative, but he then refused to provide that information to counsel for the Bank.

[83] In this context, I find it telling that, as referenced above, on the “Tenants’ Acknowledgement to Mortgagee as to Terms of Tenancy Agreement” form that was signed by “John Wall” as tenant of the Property, the tenant listed his contact phone number as 780-263-0651. It is common ground that the said number is actually the cell phone number of Mr. Grantmyre. I find there is no reasonable or rational explanation as to why the tenant would list his contact phone number as being Mr. Grantmyre’s cell phone. But it makes perfect sense if “John Wall” and Mr. Grantmyre are one and the same person.

[84] In this regard, I accept the evidence of Mr. Bechard, which was not seriously challenged. On the material before me, I find that the person who identified himself to Mr. Bechard as the tenant “John Wall” is one and the same person as Mr. Grantmyre.

[85] That Mr. Grantmyre would engage in that kind of concealment and deceit to the representatives of the Bank gives me serious concern as to his credibility.

[86] Further, in para. 8 of his affidavit, Mr. Grantmyre deposes that at the beginning of 2017, Ms. Giesbrecht was struggling to pay the Mortgage, and “at that time,” Mr. Grantmyre offered and Ms. Giesbrecht agreed to transfer title to the Property to Mr. Grantmyre. Mr. Grantmyre further deposes that “[a]t that time, the Defendant acknowledged my ownership on title.”

[87] That statement is simply not true. As I have found, it is clear that the transfer was registered without the knowledge or consent of the Bank. On cross-examination, Mr. Grantmyre readily acknowledged that at the time of the transfer he had not advised the Bank that he was taking title to the Property. He admitted that he did not so advise the Bank either before or after the transfer. He agreed that it was fair to say that the Bank was not aware that he was on title to the Property.

[88] The evidence of Mr. Grantmyre was that he took title to the Property because he and Ms. Giesbrecht believed that he “would have an easier time arranging for a new mortgage that would discharge of the existing mortgage [ sic ].”

[89] However, if that was Mr. Grantmyre’s ultimate objective, there were surely more up-front, straight-forward, and transparent methods of achieving that goal. It is not clear why Mr. Grantmyre simply did not advise the Bank of his involvement and his ultimate objective, assume the existing Mortgage, and then put in place his alternative financing to discharge the Mortgage. Alternatively, Mr. Grantmyre could have purchased the Property in the conventional sense: he could have got his financing in place in advance, purchased the Property for fair market value, and had the existing Mortgage discharged in the course of the purchase transaction. But Mr. Grantmyre did not do any of these things. Indeed, it is somewhat misleading to say that he “purchased” the Property at all, in that, he did not pay Ms. Giesbrecht fair market value for the Property. Rather, title to the Property was merely transferred to Mr. Grantmyre for two dollars, and Mr. Grantmyre took title knowing full well that there was a Mortgage on title in favour of BNS and that the Bank had commenced legal proceedings against Ms. Giesbrecht to enforce its Mortgage.

[90] I have found that the transfer of title to the Property from Ms. Giesbrecht to Mr. Grantmyre on February 15, 2017, was part of a calculated attempt to evade an unfavourable outcome in the Mortgage Action and defeat the rights of the Bank under the Mortgage. The active participation of Mr. Grantmyre in this scheme does not stand him in good stead in the eyes of the court.

[91] As a cumulative result of these and other concerns, I must conclude that I cannot accept the evidence of Mr. Grantmyre on a point in dispute unless it is supported by other evidence that I do accept.

Are the applicants entitled to an interlocutory injunction restraining BNS from transferring the Property?

The legal test

[92] The test for granting an interlocutory injunction is the well-known, three-part test set out by the Supreme Court of Canada in RJR—MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, where it was held that in order to obtain an interlocutory injunction, the moving party must demonstrate that: (a) there is a serious question to be tried; (b) the applicant will suffer irreparable harm if the injunction is not granted; and (c) the balance of convenience favours the granting of the injunction.

Is there a serious question to be tried?

[93] The Supreme Court held in RJR—MacDonald Inc. v. Canada (Attorney General) that under the first branch of the test, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried.

[94] However, it is well established that the threshold established by this first branch of the test, requiring the applicant to demonstrate a “serious issue to be tried,” is a “relatively low” threshold, “ordinarily requiring an applicant to establish little more than that the case is not frivolous or vexatious.” Naji v. Denys, 2018 ONSC 6568, at para. 42.

[95] Having said that, in my view, the instant case is one of those relatively uncommon situations where the moving party has not established, even on that relatively low threshold, that there is a serious question to be tried here. Indeed, in my view, in order for the applicants here to succeed in their claim, they would require an amendment to the Mortgages Act.

[96] Mr. Grantmyre takes the position in this proceeding that, as the holder of legal title to the Property, he ought to have been served by BNS with a copy of the statement of claim in the Mortgage Action before proceeding with the power of sale proceedings.

[97] The short answer to Mr. Grantmyre’s claim is that he was not a party to the Mortgage and that, as of the date the statement of claim was issued in the Mortgage Action, Mr. Grantmyre was not the title-holder to the Property and had no registered interest in the Property.

[98] As I have recounted above, the statement of claim in the Mortgage Action was issued on October 20, 2016. It was properly served on Ms. Giesbrecht on November 15, 2016. Mr. Grantmyre had no registered interest in the Property until February 15, 2017, when legal title was transferred to him.

[99] In a similar vein, Mr. Grantmyre takes the position that although he had been notified by Ms. Giesbrecht that the Property was to be sold under power of sale proceedings, no notice of power of sale had been provided to Mr. Grantmyre, “the legal title holder.” As presented on the motion, this was the crux of the applicants’ position.

[100] Subsection 31(1) of the Mortgages Act governs the question of who must be served with notice where a mortgagee seeks to exercise a power of sale. The enactment provides that:

A mortgagee shall not exercise a power of sale unless a notice of exercising the power of sale in the Form to this Act has been given by the mortgagee to the following persons, other than the persons having an interest in the mortgaged property prior to that of the mortgagee and any other persons subject to whose rights the mortgagee proposes to sell the mortgaged property:

1. Where the mortgaged property is registered under the Land Titles Act, to every person appearing by the parcel register and by the index of executions to have an interest in the mortgaged property.

2. Where the Registry Act applies to the mortgaged property, to every person appearing by the abstract index and by the index of writs received for execution by the sheriff for the area in which the mortgaged property is situate to have an interest in the mortgaged property.

3. Where there is a statutory lien against the mortgaged property in favour of the Crown or any other public authority and where the mortgagee exercising the power of sale has written notice of the lien, to the Crown or other public authority claiming the lien.

4. Where the mortgagee has actual notice in writing of any other interest in the mortgaged property and where such notice has been received prior to the giving of notice exercising the power of sale, to the person having such interest.

5. Where the last registered owner of the mortgaged property is a dissolved corporation, to the Minister responsible for the administration of the Forfeited Corporate Property Act, 2015.

[101] In the instant case, BNS was required by para. 1 of s. 31(1) to provide notice of power of sale to all persons “appearing by the parcel register and by the index of executions to have an interest in the mortgaged property.” The notice of sale in this case was prepared and dated January 5, 2017. It is clear from the evidence, as reviewed above, that as of that date, BNS provided notice to all persons who were required to receive notice pursuant to s. 31(1) of the legislation.

[102] Further, I note the following evidence of Mr. Grantmyre given on his cross-examination, which, in effect, concedes that the Bank complied with para. 1 of s. 31 of the Mortgages Act:

Q. No, I’m asking about the date that it was actually obtained, so that date at the top, January 5th, 2017. A. Oh, yes. Yes. Q. And that’s the same date on the notice of sale under mortgage, correct? A. Yes, correct. Q. So you would agree with me that as of that date, the only entity, other than Ms. Giesbrecht’s and the two execution creditors that had an interest registered on title to the property, was Scotiabank? A. Yes.

[103] On the evidence before me, it is clear that the Bank complied with the requirements of s. 31(1) of the Mortgages Act. Mr. Grantmyre has not established that there is any serious question to be tried regarding any allegation that the Bank failed to comply with the requirements of s. 31(1) regarding who is entitled to receive notice of the power of sale proceedings. Any claim by Mr. Grantmyre that he was entitled to notice under the legislation (at least as currently written) is nothing more than frivolous and vexatious.

[104] In his reply submissions at the hearing of the motion, Mr. Grantmyre submitted that the Bank “had a duty … to advise anybody who has a relationship with that title such as a title-holder and/or an occupant of the property, in the way of a rental, a lease, or whatever, of the goings-on in regards to the foreclosure and the power of sale and how it was going to affect them.”

[105] In my view, the duty of the Bank to give notice of the power of sale proceedings is that which is set out in the existing legislation. To the extent that Mr. Grantmyre claims that he was entitled as the legal title-holder to the Property as at February 15, 2017, to service of notice of the mortgage enforcement proceedings even though that he had no such interest as of the date of the notice of sale on January 5, 2017, it would require amendment to the Mortgages Act. That is not within the purview of this motion court.

[106] Moreover, it should not be forgotten that Mr. Grantmyre had actual notice of the Bank’s power of sale proceedings.

[107] In the circumstances, given the current legislation, I conclude that the applicants’ case cannot succeed.

[108] To the extent that Mr. Grantmyre’s oral submissions on the motion also touched on his entitlement to notice as an occupant of the property – as opposed to his entitlement as the registered title-holder of the Property, which was his certainly his central claim – it is appropriate to say something about Mr. Grantmyre’s claim as an occupant of the Property, even though that claim did not form part of the grounds of his notice of motion and was not developed in any of his written materials.

[109] Again, the scope of para. 1 of s. 31(1) of the Mortgages Act is clear that it captures only persons appearing by the parcel register and the index of executions to have an interest in the mortgaged property.

[110] The issuance of a writ of possession is governed by rule 60.10 of the Rules of Civil Procedure, which provides that:

(1) A writ of possession (Form 60C) may be issued only with leave of the court, obtained on motion without notice or at the time an order entitling a party to possession is made.

(2) The court may grant leave to issue a writ of possession only where it is satisfied that all persons in actual possession of any part of the land have received sufficient notice of the proceeding in which the order was obtained to have enabled them to apply to the court for relief .

(3) A writ of possession remains in force for one year from the date of the order authorizing its issue, and may, before its expiry, be renewed by order for a period of one year from each renewal. [Emphasis supplied.]

[111] In the instant case, a writ of possession was granted pursuant to the order of Lococo J. dated June 1, 2018. Given the express language of subrule 60.10(2), it must be inferred that Lococo J. was satisfied on the evidence before him that all persons in actual possession of the Property had received proper notice of the proceeding.

[112] It is to be remembered that prior to the issuance of the writ of possession, BNS obtained default judgment against Ms. Giesbrecht in the Mortgage Action on March 3, 2017. Again, the default judgment granted BNS possession of the Property and ordered payment by Ms. Giesbrecht in the amount of $296,636.77, plus $1,129.12 for costs. Subsequently, a notice demanding possession dated March 22, 2017, was delivered to the 22500 Creek Road property.

[113] Neither the default judgment nor the order granting the writ of possession was ever appealed. As well, no party made any effort to set aside either of those orders.

[114] Moreover, I was not privy to the material that was filed with the court before Lococo J. when the order for a writ of possession was made on June 1, 2018. The material that was filed before Lococo J. was not filed before me. By my endorsement of January 4, 2019, both parties were granted the opportunity to conduct such cross-examinations on the affidavits of the party opposite as they thought fit. Mr. Grantmyre elected to conduct no cross-examinations at all. I am otherwise not aware of any request for production of the material that was filed before Lococo J. that may have been made by Mr. Grantmyre. As far as I know, none was made.

[115] In these circumstances, it is not open to this court on the motion before me – and clearly I am not sitting as an appellate judge – to make any review or determination with respect to the merits of the order of Lococo J. dated June 1, 2018, granting the writ of possession. Generally speaking, a decision of another court ought not to be reviewed or varied by another court except by way of an available appeal route or other proper procedural context. Any attempt outside of that context to litigate, challenge, or question the underlying merits of a decision would, at first blush, constitute an impermissible collateral attack on the decision. See 644036 Alberta Ltd. v. Morbank Financial Inc., 2014 ABQB 681, at para. 60.

[116] The rule against collateral attack of a judicial decision was explained by Abella J. for the majority of the Supreme Court of Canada in British Columbia (Workers’ Compensation Board) v. Figliola, [2011] 3 S.C.R. 422 in the following terms:

The rule against collateral attack similarly attempts to protect the fairness and integrity of the justice system by preventing duplicative proceedings. It prevents a party from using an institutional detour to attack the validity of an order by seeking a different result from a different forum, rather than through the designated appellate or judicial review route: see Canada (Attorney General) v. TeleZone Inc., [2010] 3 S.C.R. 585, and Garland v. Consumers’ Gas Co., [2004] 1 S.C.R. 629.

[117] The issues raised collaterally by the applicants in Mr. Grantmyre’s final submissions on the instant motion have already been determined by courts of competent jurisdiction. Default judgment was obtained by reason of Ms. Giesbrecht’s default under the Mortgage. A writ of possession was granted in accordance with the Rules of Civil Procedure. The proper route by which to challenge the outcome of those proceedings would have been either an appeal or a motion to set aside the default judgment and/or order of Lococo J. of June 1, 2018. The applicants pursued neither route. It is now not open to them to seek to mount a collateral attack against those orders by way of this motion.

[118] For all of these reasons, I conclude that the applicants have not satisfied even the low threshold of the first branch of the test for an interlocutory injunction.

[119] By reason of that conclusion alone, the inquiry could well end there.

[120] However, in the circumstances, I would go on to address the other two branches of the RJR—MacDonald Inc. v. Canada (Attorney General) test for an interlocutory injunction.

Will the applicants suffer irreparable harm if the injunction is not granted?

[121] In my view, the applicants have not established that they will suffer irreparable harm if the injunction is not granted. As the Supreme Court said in RJR—MacDonald Inc. v. Canada (Attorney General), irreparable harm “is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other.”

[122] The only evidence of alleged irreparable harm is set out in para. 7 of Mr. Grantmyre’s affidavit, where he maintains that Rivard’s Sawmill is “fully operational and has recently secured a number of new contracts that will be jeopardized if the Property is sold. If the Property is sold, it may force the closure of the Sawmill.”

[123] However, the evidence of Mr. Grantmyre does not explain why the contracts of Rivard’s Sawmill will be necessarily jeopardized if the Property is sold. There is no explanation set out in the applicants’ material as to why the particular location of the Property is somehow critical to the business operations of Rivard’s Sawmill. One would have thought that there is nothing particularly unique in the location or nature of the Property that would prohibit the operations of Rivard’s Sawmill from being carried out on any other suitable property.

[124] Indeed, the evidence indicates that the Property has been vacant since December 19, 2018. That is, the business of Rivard’s Sawmill has not operated on the premises of the Property since that date. It may be that the business of Rivard’s Sawmill has operated out of another location since December 19, 2018. It may be that the business of Rivard’s Sawmill has not been conducted out of any property since December 2018. There is no evidence before me to suggest that either proposition is true. But there is absolutely no evidence before me that indicates that Rivard’s Sawmill has suffered irreparable (or any) harm by reason of not being able to run its operations out of the Property since December 2018.

[125] Further, given my concerns regarding the evidence of Mr. Grantmyre, I do not simply accept his assertion, without more, that if the Property were sold, “it may force the closure of the Sawmill.” Indeed, on the evidence before me, that bald-faced assertion is neither apparent nor explained. It strikes me as mere speculation and hyperbole, asserted for the strategic purposes of the litigation. Without more, I reject Mr. Grantmyre’s assertion in that regard.

[126] The evidentiary record before me is so bereft of any particulars concerning the applicants’ alleged irreparable harm that, on the evidence before me, I cannot conclude that the applicants would suffer any harm at all, much less any irreparable harm.

[127] In the circumstances, I conclude that the applicants have failed to establish that they would suffer irreparable harm if the injunction were not granted.

[128] As such, the applicants have also failed to satisfy the second branch of the test for obtaining an interlocutory injunction.

Does the balance of convenience favour the granting of the injunction?

[129] There is very little – if anything – in the applicants’ evidence that speaks to the issue of the balance of convenience. That issue is essentially unaddressed in the applicants’ materials. In particular, there is nothing in the applicants’ materials that would convince a court, on “a determination of which of the two parties will suffer the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits,” that the balance of convenience favours the granting of the injunction.

[130] In particular, there is no evidence from the applicants as to the precise manner in which they could be said to be affected if the injunction were not granted. There is no real evidence as to any alleged effect on the business of Rivard’s Sawmill if there is a court order restraining Rivard’s Sawmill from conducting business on the Property. Similarly, there is no evidence as to any alleged effect on any alleged employee of Rivard’s Sawmill. Indeed, there is no real evidence before the court that Rivard’s Sawmill has any employees.

[131] In any event, I agree with the respondent Bank that the balance of convenience does not favour the granting of the requested injunction. BNS currently has a valid and binding agreement of purchase and sale for the Property with a third-party purchaser. The evidence indicates that at this point the only impediment to the closing of that transaction would have been the issuance of an injunction from the court on this motion. If the injunction had been granted, it would appear that BNS would have been forced into a breach of the agreement of purchase and sale with the third-party purchaser and would have been exposed to a claim for damages.

[132] In these circumstances, the applicants have not established that the balance of convenience favours the granting of the requested injunction.

[133] As such, the applicants have also failed to satisfy the third branch of the test for obtaining an interlocutory injunction.

Conclusion

[134] For all of these reasons, the applicants’ motion for the interim injunction is dismissed.

[135] The respondent BNS was successful on this motion and is presumptively entitled to its costs.

[136] If the parties are unable to agree on the question of costs, they may file brief written submissions with the court, of no more than five (5) double-spaced pages (exclusive of any costs outline, bill of costs, dockets, offers to settle, or authorities), in accordance with the following schedule:

a. The respondent shall deliver its submissions within thirty (30) days following the release of these reasons. b. The applicants shall deliver their submissions within twenty (20) days following service of the submissions of the respondent. c. The respondent shall deliver its reply submissions, if any, within five (5) days following service of the applicants’ submissions. d. If any party fails to deliver their submissions in accordance with this schedule, they shall be deemed to have waived their rights with respect to the issue, and the court may proceed to determine the question of costs in the absence of their submissions.

[137] The title of proceedings in this matter shall be amended so as to reflect the proper legal name of the corporate applicant and, in particular, the word “Builder’s” in the title of proceedings shall be deleted and replaced with the word “Builders’” and all further documents filed in this proceeding shall bear that corrected title of proceedings.

Original signed by “ Justice J. Paul R. Howard ” J. Paul R. Howard Justice Released: May 2, 2019