Court File and Parties
COURT FILE NO.: CV-18-46 DATE: 20190529 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Linda Rose, Applicant
AND: Ronald William Bilmer aka Ron Bilmer, Respondent
COUNSEL: Robert Hiseler, for the Applicant Michael Gunsolus, for the Respondent
Heard: May 16, 2019
Reasons FOR JUDGMENT
C.M. SMITH, J
OVERVIEW
Introduction
1On October 2nd, 2008, the National Bank of Canada obtained a judgment against the Respondent which totalled approximately $60,000. The National Bank subsequently filed a Writ of Seizure and Sale with the sheriff's office on October 15th, 2008. That judgment and Writ of Seizure and Sale were subsequently assigned by the National Bank to Mr. Vincenzo Mottile on September 15th, 2009.
2In or about January of 2012, the Respondent's then counsel, negotiated a settlement of the outstanding judgment with Mr. Mottile, pursuant to which the parties thereto agreed that the sum of $74,122.67 was the full amount owing outstanding at that time. On or about the 19th of January 2012, the Respondent supplied Mr. Mottile with funds in that amount in satisfaction of the outstanding judgment.
3On the 19th of January 2012, Mr. Mottile assigned the judgment to the Applicant, Linda Rose, by way of an assignment of judgment and Writ of Seizure and Sale. On the same day, Mr. Mottile supplied a full and final release to the Respondent releasing the Respondent from any and all claims relating to the subject judgment.
4The Writ of Seizure and Sale was either lifted or subsequently expired after the passage of six years in 2014.
5The Applicant, Lynda Rose, brings this application pursuant to the provisions of Rule 60.07 of the Rules of Civil Procedure for an order issuing a Writ of Seizure and Sale against the Respondent.
6For the reasons described below, I decline to issue a new Writ of Seizure and Sale and I have dismissed this application.
Facts and Procedural History
7The Respondent, at all material times, was the owner of a one-half interest in a property described as Pt Lt 1 Con 9 N Monaghan, known municipally as 6733 Highway 7, Cavan, Ontario (the property) which is apparently a 1.15 acre property that contains at least one building out of which the Respondent operated his haulage business. This property was made the subject of a public auction scheduled by the Sheriff at the direction of Mr. Mottile in his capacity as assignee against the Respondent, said sale having originally being scheduled for January 24th, 2012. Sometime prior to the date of sale, the Respondent became involved in discussions with Mr. Gregory Hipson about his financial situation. Mr. Hipson was at all material time a friend of the Respondent, as well as a tenant at the subject property where Mr. Hipson operated his own business. Mr. Hipson is also the common-law partner of the Applicant. As a result of those discussions, it was agreed that Mr. Hipson and the Applicant would provide funds to the Respondent in order that he could settle the debt owing pursuant to the outstanding judgment, then held by Mr. Mottile. Mr. Hipson and the Applicant subsequently provided the Respondent with funds which in turn were subsequently supplied at the Respondent's direction to the assignee of the judgment herein, Mr. Vincenzo Mottile in full satisfaction of the outstanding judgment. It was at that point things started to go wrong.
8The Applicant and her common-law partner Mr. Hipson take the position that these funds were advanced to the Respondent as a loan which was to be secured by way of the Applicant taking a 25 per cent ownership interest in the property, and further, by way of another assignment of the judgment herein from Mr. Mottile to Ms. Rose. The Applicant asserts that this arrangement was conceived by the Respondent's then solicitor and that it was agreed to by the parties while all of them, being the Respondent, the Applicant, Mr. Hipson and the Respondent's solicitor, met together in early January 2012.
9The Respondent, on the other hand, asserts that the monies were advanced to him by the Applicant and Mr. Hipson as consideration for the transfer of a 25 per cent interest in the property. That transfer did, in fact, take place on January 18th, 2012. The parcel register for the property shows a transfer from the Respondent to Mr. Hipson for a consideration in the amount of $74,123.
10On January 19th, 2012, Mr. Mottile executed a full and final general release in favour of Mr. Bilmer pursuant to which Mr. Mottile acknowledged receipt of funds in the amount of $74,122.67 and released the Respondent "…" of and from all claims, demands, suits, actions, and causes of action of every kind, known or unknown, howsoever arising, including, without restricting the generality of the foregoing, all claims arising out of or in any related to the actions of the releasees which the undersigned now has, has had or hereafter can, shall or may have for or by reason or referable to the issues in the following proceeding:
Ontario Superior Court of Justice, File Number CV-08-358292 and the Assignment of Judgment and Writ of Seizure and Sale.
The release goes on to include a full and final release of all claims that the assignee has as against the Respondent and goes on to indicate that the provisions of the release shall inure to the benefit of the releasees, their successors and assigns and shall be binding upon the undersigned, being Mr. Mottile. Unfortunately on the same day, Mr. Mottile also executed an assignment of Judgment and Writ of Seizure and Sale of the original judgment in favour of the Applicant, Linda Rose. There is no evidence before the court as to which document was signed first.
13After the real estate transfer was completed, and after Mr. Mottile executed and forwarded both the release of the Judgment, Writ and Seizure and Sale, as well as the Assignment of the Judgment and Writ of Seizure and Sale to the Applicant, matters went into dormancy. Apparently there was some acrimony between the Respondent and Mr. Hipson for a period of time which the Applicant claims deterred her from taking any steps. In the spring of 2015, the Applicant was diagnosed with some very serious medical difficulties which occupied her attention for at least two years thereafter. Apparently Mr. Hipson, the Applicant's partner, also suffered some medical issues during this period of time. The Applicant did not begin her efforts to recover on the assignment of Judgment Writ of Seizure and Sale received from Mr. Mottile by way of letter, until April 10th, 2017, when her counsel forwarded their first correspondence to Mr. Bilmer advising him of their intentions in that regard. Apparently there had been no other efforts on anyone's part to take such steps between January 2012 and April 2017.
14There is no evidence before the court such as a property appraisal to indicate the actual value of the property, now or at the time in question. The only evidence we have of value are the numbers set out on the property register regarding the various transactions recounted above. The property register also shows encumbrances on the property in favour of the Canada Revenue Agency, and with respect to outstanding property taxes.
Issues
- Should this court grant leave to issue a Writ of Seizure and Sale pursuant to the Judgment?
Analysis
15Rule 60.07(2) of the Rules of Civil Procedure, R.R.O. 1990, Regulation 194, reads as follows:
Where Leave is Required
(2) If six years or more have elapsed since the date of the order, or if its enforcement is subject to a condition, a writ of seizure and sale shall not be issued unless leave of the court is first obtained. O. Reg. 770/92, s. 14.
16A party seeking leave envisioned by Rule 60.07(2) bears the onus of satisfying the issuing court that there has been no acquiescence in non-payment or waiver of the assignees' right under the Judgment. In the matter of the Royal Bank of Canada v. Correia, 2006 ONSC 26976 at paragraphs 5 and 6, Master R. Dash held as follows:
"[The Applicant] must adduce evidence explaining the delay such that the court may conclude that the Plaintiff has not waived its right under the judgment or otherwise acquiesced in non-payment of the judgment. The defendant may raise other grounds to convince the court that it would be inequitable to enforce the claim. For example the defendant could demonstrate that he has relied to his detriment or changed his financial position in reliance on reasonably perceived acquiescence resulting from the delay. Of course the onus would be on the defendant to adduce evidence of such reliance and detriment."
17In the instant case, the Applicant has explained the delay by pointing to the acrimonious relationship between, on the one hand, herself and Mr. Hipson, and on the other hand, the Respondent. The Applicant points as well to her medical issues. The Applicant asserts that these factors impeded her ability to enforce the judgment, and suggests as well that some legal advice she may have received led her to believe that the judgment would never expire and that there was consequently no urgency in enforcing same. The Applicant further asserts that she has never waived the enforcement of the Judgment nor has she ever advised the Respondent that she acquiesced non-payment.
18I do not accept the Applicants contention that there has been no acquiescence, but even if I did, in my view, the issue is not so much what, if anything, the Applicant did or did not do in terms of complying with the provisions of Rule 60.07(2) but rather whether or not the Judgment itself remains enforceable. The Respondent was granted a release by Mr. Mottile, who at the time, was the rightful assignee of the Judgment, and who at the time also had the sole authority to release the Respondent from his obligations under that Judgment. In the case of Arif v. Li, 2016 ONSC 4579, M.D. Faieta, J considered this issue at paragraph 50.
A review of the case law shows that a person is bound by a signed release unless one of the following circumstances exist:
∙ Non Est Factum – The signer, through no carelessness on his or her part, is mistaken as to the document’s nature and character; ∙ Fraud or Misrepresentation – The signer is induced to sign the contract by fraud or misrepresentation; ∙ Objective Lack of Consensus Ad Idem - Where it is unreasonable for a person relying on the signed contract to believe that the signer really did assent to its terms; ∙ Unconscionable – was the contract formed in unconscionable circumstances; ∙ Public Policy – There is an overriding public policy that outweighs the very strong public interest in the enforcement of contracts.
19There is no evidence before this Court to show that any or all of those five circumstances obtain. Indeed, there is no evidence before this Court whatsoever as to the circumstances in which Mr. Mottile signed the release. Given that Mr. Mottile was assigned the judgment for some form of consideration by the National Bank, given that he signed a release in favour of the Respondent, Mr. Bilmer, and given Mr. Bilmer's own evidence that he received funds from Mr. Hipson and the Applicant herein for that very purpose, this Court is left with no choice but to conclude that those funds were, in fact, conveyed by Mr. Bilmer to Mr. Mottile in exchange for the signed release. That being the case, this Court can only conclude that those funds were, in fact, provided to Mr. Mottile prior to him executing the release in favour of the Respondent.
20That brings me to the issue of whether the funds were supplied to the Respondent by Mr. Hipson and the Applicant as a loan or whether they were supplied to the Respondent as consideration for receipt of the share of the ownership interest in the subject property.
21The Respondent's Book of Authorities contains an excerpt from the Canadian Encyclopedic Digest on the subject of Debtor and Creditor, including Jurisprudence and the nature of the debtor/creditor relationship. Paragraph 62 of that item sets out the following:
"Whether a creditor-debtor relationship exists in law may be an issue for judicial determination based on the nature of the contract between the parties, commercial custom and usage, and similar determination of fact."
I am satisfied on the balance of probabilities by the evidence before me that the relationship between the Applicant and the Respondent is not a creditor/debtor relationship but rather is one of vendor/purchaser.
22Mr. Hipson asserts in his Affidavit sworn May 24th, 2018 filed herein, and again in his cross-examination under oath on that Affidavit which took place on July 25th, 2018, that the property had little, if any, value and was encumbered by the Respondent's debts at the time. There is no evidence in the form of an appraisal of any kind before this court. All the court has to go on in this regard is a copy of the parcel register for the subject property which shows that on August 31st, 1995, J. Watt Leasing Inc. and Brian McCarrell Trucking Inc., purchased the property for the sum of $125,000. Subsequently, on September 16th, 2005, an unquantified portion of that property was conveyed to the Respondent, Ronald William Bilmer, for the amount of $26,000. On November 11th, 2008, a lien was placed against the property in favour of Her Majesty the Queen in the Right of Canada as represented by the Minster of National Revenue in the amount of $23,761. The parcel register does not provide any particulars as to the parties to that lien. However, one can safely assume that that is the Revenue Canada lien referred to by the various parties to this matter in their materials.
23Notwithstanding Mr. Hipson's comments to the contrary, the property clearly was of substantial value as of January 2012. I note, with interest, that Mr. Hipson himself purchased a further portion of that property on November 28th, 2014, only two years after the events giving rise to this matter, for the sum of $115,000. It would appear that the encumbrance in favour of the CRA was still on title at that time. I conclude from that fact that Mr. Hipson found the property to be of some value at the time in question.
24The Applicant, and Mr. Hipson, argued that the funds advanced to the Respondent were a loan to be secured by an ownership interest in the subject property. The Respondent, on the other hand, contends that the monies advanced to him by the Applicant and Mr. Hipson were, in fact, payment for a 25 per cent ownership interest in the subject property. I turn to a consideration of commercial custom and practice to assist in resolving that conflict.
25In my view, when parties enter into a debtor/creditor arrangement and funds are advanced by one party to another as a loan it is customary for the lending party to look for security of some form. Typically, in circumstances such as these, the lender registers a mortgage on the property held in the name of the debtor. At the very least, one would expect a promissory note would be provided by the borrower in favour of the lender as evidence of the loan. No such security of any kind appears to have been requested, sought or obtained by the Applicant in this matter in order to secure the funds which she claims were a loan to the Respondent.
26People often raise funds to satisfy debts or make other unrelated purchases by selling an asset to raise said funds. If the asset in such a transaction is a piece of real estate then normal commercial practice would lead one to expect the purchaser to advance funds and in return to be provided with an ownership interest in the subject property which then leaves the vendor free to deal with the funds received in any way they see fit. The evidence before me in this case, particularly the parcel registry, satisfies me on the balance of probabilities that such is what occurred here.
27Much is made in the course of submissions by the parties about the role of the Respondent's solicitor, who represented the Respondent at all material times in January of 2012. The Applicant and Mr. Hipson both assert that they met together with the Respondent at the Respondent's solicitor's office at the time in question and that during the course of that meeting the Respondent's solicitor asked his client, the Respondent herein, to absent himself from the meeting so he could speak directly with the Applicant and Mr. Hipson. Mr. Bilmer denies that rather unusual event occurring, as did the Respondent's solicitor in the course of both his Affidavit material and his cross- examination on that Affidavit. The Respondent's solicitor insists in his evidence that he was simply acting for the Respondent, Mr. Bilmer, in order to complete a straight forward real estate transaction with the Applicant and Mr. Hipson being the purchasing parties. Certain of the Respondent's solicitor's correspondence has been produced and attached, both in the form of satisfaction of undertakings on the cross-examination of his Affidavit and through the Affidavits of various parties. I note that the Respondent solicitor's correspondence to counsel for Mr. Mottile, contains a reference to a request for an Assignment of the Judgment herein, that correspondence being dated January 17th, 2012. On the other hand, there is also correspondence from the Respondent's solicitor to Mr. Hipson dated January 4th, 2012 where, in addition to enclosing the original executed Assignment of Judgment, the Respondent's solicitor also enclosed a copy of the transfer/deed regarding the 25 per cent interest in the property, said deed bearing the same registration number as that shown on the parcel registry. From this I conclude that there was obviously a considerable amount of confusion in this situation by virtue of the relationship, whatever it was, as between the Respondent's solicitor, the Applicant and Mr. Hipson. I am unable to conclude anything else from those materials, although I am satisfied that each of the parties to this transaction would have been further ahead had they taken the trouble to obtain Independent Legal Advice.
28Mr. Gunsolus, counsel for the Respondent, Mr. Bilmer, pointed out in his able submissions that Mr. Bilmer comes to the Court as a Respondent. Mr. Bilmer has not advanced a prayer for relief of any kind and, as such, bears no onus of proof. Rather, it is up to the Applicant to satisfy me on a balance of probabilities of the validity of her claim. In view of the documentation that has been supplied to this Court, including the release signed by Mr. Mottile in favour of the Respondent, and the parcel registry of the property showing the transfer from the Respondent to Mr. Hipson, I cannot be satisfied that this transaction represents anything other than what it appears to be on its face, that being a sale by the Respondent of a 25 per cent interest of the value of his property to Mr. Hipson, common-law partner of the Applicant, in exchange for consideration in the amount of $74,000, which happens to be the amount required to satisfy the outstanding judgment originally obtained against the Respondent by the National Bank and subsequently assigned to Mr. Mottile. Were I to conclude otherwise and grant the Applicant the relief she seeks, the various judgment creditors herein would receive double recovery on the judgment in question from the Respondent, Mr. Bilmer, which of course would be an unjust, unfair and inappropriate result.
29In the end, the Applicant has failed to satisfy me on a balance of probabilities of the validity of her claim and the Application is therefore dismissed. This of course does not preclude the Applicant from seeking her remedy elsewhere.
30I invite counsel to make written submissions as to costs. I would suggest that the successful party, the Respondent, make submissions in writing no longer than three pages double spaced and that those submissions be supplied to the Applicant's counsel and to the Court, on or before June 15th, 2019. Thereafter, the Applicant shall have until June 30th, 2019 to file their own written submissions on the issue of costs, again limited to three pages double spaced. In the event that I do not receive any written submissions, I will make what I feel is the appropriate Order.
C. Smith
Released: May 29, 2019