Johnson v. Garner, 2019 ONSC 5771
COURT FILE NO.: CV-17-189
DATE: 2019-10-15
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mary-Anne Johnson, Executrix of the Estate of Verna Marinic, deceased
Plaintiff
– AND –
Michael Frederick William Garner and Maryann Rose Garner
Defendants
COUNSEL:
James Riewald, Counsel for the Plaintiff
Defendants, Self-Represented
HEARD: October 4, 2019
REASONS FOR JUDGMENT
HEALEY, J.:
Nature of the Motion
[1] The plaintiff, as estate trustee for the estate of her late mother, Verna Marinic, moves for summary judgment on the claim, seeking payment for two mortgages, possession of the lands secured by the mortgages, and leave to issue a writ of possession.
[2] Judgment was granted following the argument of the motion, with short oral reasons, to be supplemented by these written reasons.
The Evidence
[3] The defendants do not deny that they signed two vendor take-back mortgages at the time that they purchased the subject property from Verna Marinic in April 2016. Their position is that the mortgages have been satisfied and discharged.
[4] The first mortgage dated April 19, 2016 was made between the defendant, Maryann Garner, and Vera Marinic charging the property for a term of one year securing the principal sum of $720,000 and interest thereon at the rate of 3% per annum. The defendant Michael Garner guaranteed payment of the first mortgage.
[5] The second mortgage dated April 19, 2016 was also made between Maryann Garner and Vera Marinic, charging the property for a term of six months securing the principal sum of $100,000 and interest thereon at the rate of 6% per annum. Again, Michael Garner guaranteed payment of the second mortgage.
[6] Vera Marinic died on January 28, 2017. This proceeding was begun on January 31, 2017. Although this is irregular, it does not nullify the proceeding as an order to continue was obtained on August 31, 2017.
[7] The defendants were initially noted in default. In April, 2017 they brought a motion to set aside the noting in default.
[8] The plaintiff provides evidence and an accounting that default in payment under the first mortgage occurred on July 31, 2016 and continues. The first charge matured on March 31, 2017, at which time the balance of the principal, together with any outstanding interest and expenses, became payable. No amounts have been paid on the principal or outstanding interest since. No agreements have been made between the plaintiff and the defendants to amend, extend or renew the first mortgage following its maturity. The amount due under the first charge as of April 30, 2018 was $755,255.87.
[9] Similarly, the plaintiff provides evidence and an accounting that default in payment under the second mortgage occurred on October 31, 2016 and continues. Following its maturity on September 30, 2016, no amounts have been paid on the principal or outstanding interest. No agreements have been made between the plaintiff and the defendants to amend, extend or renew the second mortgage following its maturity. The amount due under the second mortgage as of April 30, 2018 was $106,436.10.
[10] The evidence is that Vera Marinic had retained her former counsel, Ryan Carson, on September 9, 2016 to help her collect the debt. On September 26, 2016 his client advised him that the buyer had called her and offered a plan to cover missed payments, and asked him to hold off on further action at that time. Vera Marinic contacted him again on or around November 1, 2016 to seek his assistance to resolve the situation in the most economically feasible way. At that time, she provided her address as being 3136 Dundas Street West, Apt. 222, Oakville. She contacted Mr. Carson again on November 21, 2016 inquiring whether he had had success in contacting Mike Garner regarding the non-payment of mortgage. She advised him that the bank “refused cheques after I was in touch with you last”.
[11] Mr. Carson called the Garners and also sent a letter notifying them of their default, asking that they contact his office by December 1, 2016 to confirm that they had been able to put in place satisfactory terms, presumably meaning new financing to pay out the debt to Vera Marinic.
[12] Mr. Carson made contact with Mike Garner and put him in touch with a mortgage broker to attempt to arrange refinancing. Mr. Carson’s affidavit indicates that never in his conversations or email exchanges with Mr. Garner did that defendant ever advise that the mortgages had been previously paid in full or discharged. Similarly, in his conversations or correspondence with his client, Ms. Marinic never advised that the mortgages had previously been paid in full or discharged.
[13] On December 13, 2016, Mr. Carson wrote to Mike Garner to advise that the mortgage broker had not been able to arrange a new mortgage and that the mortgages were significantly in arrears or matured. He advised Mr. Garner that payment arrangements needed to be made immediately, failing which power of sale proceedings would be commenced.
[14] On December 14, 2016 Mr. Carson had an email exchange with his client in which she instructed him to issue power of sale proceedings. During that exchange Mr. Carson asked his client what his relationship was with Mike Garner. Vera Marinic’s responding email of that same date advised “it was the real estate agents who worked very hard to help Mike secure a mortgage and put together a deal. I have never met him or his family.”
[15] In contrast, the evidence of the defendants is that they met personally with Vera Marinic. The evidence that each provided on cross-examination is vastly different. Maryann Garner testified that the first meeting that she and her husband had with Vera Marinic occurred about four months after they purchased the property, although she was not sure of the date. Her evidence is that she and her husband met with the deceased between five to ten times. She could not recall how long after the first meeting that the second meeting occurred. She testified that sometimes they would bring their daughters with them. She could not describe Vera Marinic’s appearance and could not recall whether she was in a wheelchair. She could not recall specifics of their discussions. Mrs. Garner refused to answer any more of Mr. Riewald’s questions on her examination, and insisted that it be terminated.
[16] Mike Garner testified on cross-examination that he never met the deceased before September 30, 2016. He and his wife went to Burlington to meet with her at her retirement residence. He could not recall the address. He could not recall anything specific about her appearance, including hair colour or its length. Most significantly, he testified that the meeting of September 30 was the only time that he met Vera Marinic, and that no other family members came.
[17] Mr. Garner disputed on cross-examination that Vera Marinic had told her lawyer that she never met the family because, as he explained, she never communicated with anyone through email. The evidence filed by the plaintiff on this motion clearly contradicts that proposition.
[18] The Garners have produced documents allegedly signed by Vera Marinic on September 30, 2016 attached as exhibits B and C to their motion record, which on their face state that the first and second mortgages are paid in full (the “discharge documents”). They also rely on a copy of a bank statement for the period September 2-27, 2016 which shows withdrawals of over $119,000. Most of these withdrawals are in increments of $10,000, spread throughout the month.
[19] Mike Garner testified that when the defendants met with Vera on September 30, 2016, they brought with them a bag of cash containing $100,000 in $100 bills. It is his position that they gave this money to her at the meeting to discharge the second mortgage. It is his evidence that she requested cash. He could not remember whether the mortgage was in default at the time of the meeting.
[20] Mr. Garner could not remember who drafted the discharge documents, or whether they were prepared by a lawyer. He could not remember whether he brought them with him to the meeting on September 30, 2016.
[21] The Garners did not bring the original discharge documents to their cross examinations, even though directed to do so in the notice. The Garners failed to respond to requests made on July 31 and August 20, 2019 to produce the discharge documents for inspection.
[22] The defendants have not produced any of the banking records for the account or accounts from which the mortgages were being paid before they went into default, even though Mr. Garner gave an undertaking to produce bank statements for his personal accounts from March 2016 to September 30, 2016. Mr. Riewald reminded him of this undertaking on August 20, 2019 but still no documents were produced.
[23] The plaintiff has also provided bank statements for an account held by her mother from July 29, 2016 to January 31, 2017. The statement shows that Vera Marinic attempted to deposit payments for the first mortgage in the amount of $3,408 on October 3 and again on October 14, 2016. This was after the date that the defendants allege that she signed the discharge documents. The statements detail that those two payments were returned as non-negotiable.
[24] The plaintiff has also provided copies of statements for Vera Marinic’s remaining bank accounts in which she would be able to make deposits at the time. None show a deposit of $100,000 after September 30, 2016.
[25] The Garner’s attempts to refinance continued in January, 2017. On January 4, 2017 Mr. Garner wrote to Mr. Carson by email and advised that he was in the process of securing funds to bring the mortgages up to date. On January 9, 2017 he again advised by email that he would be paying the outstanding amount to bring the first and second mortgages up to date as of January, 2017.
[26] As earlier stated, in April, 2017 the defendants brought a motion to set aside the noting in default. In the affidavit filed in support of that motion, Maryann Garner provided evidence that they were in progress with a farm lending finance specialist to “correct the default”. They were requesting adequate time for the specialist to complete this task, and to work out payment arrangements to remain at the property. She deposed that they had never been told about Mrs. Marinic’s passing until two months after the fact, and that they were “willing to work with family of Vera Marinic to come to some sort of arrangement on financing of said property.” There is no mention in the notice of motion or in her affidavit of the discharge documents allegedly signed on September 30, 2016.
[27] Neither party could provide any reasonable explanation for why their motion material would contain this significant omission.
[28] In the responding affidavit for this motion, the defendants allege that they confronted Mr. Carson and told him that the mortgages had been discharged after they became aware of Vera Marinic’s death.
[29] The defendant Mike Garner was questioned about whether he had ever produced a copy of the discharge documents before listing them in his affidavit of documents. That affidavit of documents, together with schedule A documents, was served on December 4, 2018. He answered that “perhaps” that was the first time the discharge documents had been revealed. His evidence was that he never gave Mr. Carson a copy of the discharge documents because Mr. Carson never asked for them.
The Position of the Defendants
[30] The position of the defendants is that the mortgages were discharged as of September 30, 2016. The defendants state that there is a genuine issue for trial raised by the plaintiff’s allegation that the discharge documents are fake and Vera Marinic’s signature a forgery, and that expert evidence is required from a handwriting expert. They argue that the evidence presented on this motion raises issues of credibility that the court cannot fairly resolve without the ability to evaluate the evidence at a trial.
Issues
[31] The issues to be determined are as follows:
(a) Is this an appropriate case for summary judgment?
(b) Whether there is a genuine issue requiring a trial with respect to the claim or defence?
(c) If not, what if any amounts are owed to the plaintiff?
(d) Is the plaintiff entitled to a writ of possession?
Is This an Appropriate Case for Summary Judgment?
[32] With respect to when summary judgment can be granted, Karakatsanis, J., writing for the Court in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (S.C.C.), stated at para. 49:
There will be no genuine issue requiring trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process 1) allows the judge to make the necessary findings of fact, 2) allows the judge to apply the law to the facts, and 3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[33] At para. 50, the Court defined the overarching issue to be “whether summary judgment will provide a fair and just adjudication.” Karakatsanis, J. went on to say that “the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.”
[34] The powers available under rr. 20.04(2.1) and (2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 are presumptively available: Hryniak, at para. 67. They only become unavailable where it is in the interest of justice for such powers to be exercised only at trial. At para. 56 of Hryniak the Court noted: “the interest of justice cannot be limited to the advantageous features of a conventional trial, and must account for proportionality, timeliness and affordability. Otherwise, the adjudication permitted with the new powers – and the purpose of the amendments – would be frustrated.”
[35] In terms of the approach to a motion for summary judgment, Hryniak directs at para. 66 that the judge should first determine if there is a genuine issue requiring a trial based only on the evidence before her, without using the new fact-finding powers. If there appears to be a genuine issue requiring a trial, she should then decide if the need for a trial can be avoided by using the new powers under rr. 20.04(2.1) and (2.2). These powers may be used by the motion judge in her discretion provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[36] The court must take a hard look at the evidence on a motion for summary judgment to determine whether there is, or is not, a genuine issue for trial, and may freely canvass the facts and law in doing so. The moving party bears the onus of establishing that there is no triable issue; however, the responding party on a motion for summary judgment must “lead trump or risk losing”: 1061590 Ontario Ltd. v. Ontario Jockey Club, 1995 CanLII 1686 (ON CA), 1995 CarswellOnt 63 (Ont. C.A.), at para. 36. It is only after the moving party has discharged its evidentiary burden of proving that there is no genuine issue that requires a trial for its resolution that the burden shifts to the responding party to prove that the claim or defence has a real chance of success: Cuthbert v. TD Canada Trust, 2010 ONSC 830 (Ont. S.C.J.), at para. 13.
[37] Just like the moving party, the responding party must put their best foot forward on a motion for summary judgment, and is not entitled to rely on the prospect of additional evidence that may be tendered at trial: Chernet v. RBC General Insurance Co., 2017 ONCA 337 (Ont. C.A.) at para. 12; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (Ont. S.C.J.), at para. 26, aff’d 2014 ONCA 878 (Ont. C.A.), leave to appeal to SCC refused, [2015] SCCA No. 97 (S.C.C.). This means that although the onus is on the moving party to establish the absence of a genuine issue requiring a trial, there is an evidentiary burden on the responding party, who may not rest on the allegations or denials in the party’s pleadings, but must present by way of affidavit, or other evidence, specific facts showing that there is a genuine issue for trial: Cuthbert, at para. 12; Sanzone v. Schechter, 2016 ONCA 566 (Ont. C.A.), at para. 30. As stated in Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 11 O.A.C. 201 (Ont. C.A.), at para. 17, “[t]he motions judge is entitled to assume that the record contains all the evidence which the parties will present if there is a trial.”
[38] These principles were more recently affirmed again in Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438 (Ont. C.A.), at para. 7.
[39] I am satisfied that there is no genuine issue requiring a trial in this case. Applying the test set out in Hryniak v. Mauldin, 2014 SCC 7, I find that I am able to reach a fair and just determination on the merits on the record filed. Both parties have presented all of the evidence available, and the defendants have been cross-examined. Fact-finding is not hindered in any way. The facts can be readily applied to the applicable law, which is not in dispute. The evidence easily allows me to make credibility findings.
[40] On the basis of the evidence before me on this motion I find that the issues, including findings of credibility, are all able to be determined expeditiously, without need for a trial or resort to the expanded powers set out in rr. 20.04(2.1) and (2.2). A full determination of the issues requires no further time before the court.
Is there a genuine issue requiring a trial?
[41] A mini-trial or trial may be warranted when there are real issues of credibility, or questions about the reliability of evidence, that cannot be resolved on review of a paper record. This is not the situation here.
[42] I find that the evidence on this motion clearly establishes that the discharge documents are forgeries, and do not need a handwriting expert to establish this fact. I draw an adverse inference from the fact that the defendants have failed to produce the original documents for inspection. I also draw an adverse inference against the defendants for the failure to answer their undertakings.
[43] The defendants’ evidence about their meeting with Vera Marinic is not credible. Their evidence has all the hallmarks of lack of credibility – it is inconsistent with the objective evidence, it is internally inconsistent and contradictory, and it is vague, evasive and argumentative. They have provided no rational explanation to reconcile the contents of their motion material to set aside the default judgment with their allegation that the mortgages were discharged. They have provided no rational explanation to reconcile their attempts to refinance the property in January, 2017 with their allegation that the mortgages were discharged. I go further to find that they have deliberately committed perjury and attempted to mislead the court, both in their affidavit filed on this motion and during their examinations under oath. They never met with Vera Marinic, they did not provide her with cash, and she did not sign the discharge documents. There is no aspect of their evidence that is believable given all the available evidence. They concocted their story after learning of Vera Marinic’s death, expecting that it could not be disproved.
The amount owed under the charges
[44] The plaintiff’s evidence that the mortgages have not been paid since 2016 remains unchallenged given my rejection of the defendant’s evidence. The evidence establishes that the defendants had difficulty meeting their mortgage payments very soon after the closing. Mike Garner’s first excuse was that some of his tenants were behind in their payments to him. For later payments, no excuse was offered but the evidence before the court was that the cheques provided by the defendants were returned for insufficient funds.
[45] Mr. Riewald has submitted an updated statement showing the principal, interest and expenses permitted to be recovered under the standard charge terms, owing as of the date of the motion. On the first mortgage that sum is $787,597.37. On the second mortgage that sum is $115,551.70.
[46] The plaintiff shall have its substantial indemnity costs of the action. Costs on this scale are permitted by the standard charge terms, but I would have awarded them on this higher scale to sanction the defendants’ conduct in any event.
[47] I have reviewed the Bill of Costs of the plaintiff and considered the factors set out in r. 57.01(1). Overall, I find the costs claimed by the plaintiff to be fair and reasonable and within the reasonable expectation of the defendants, given the steps necessary to obtain judgment. I have awarded costs to the plaintiff in the amount of $26,478, inclusive of HST.
Is the plaintiff entitled to a writ of possession?
[48] The mortgages have been in default since 2016 and the defendants have known of this proceeding since 2017. They have lived on the property throughout that time, or at least were still on the property at the time of their cross-examinations in July, 2019.
[49] The plaintiff’s material includes an occupancy check, which indicates that the defendants, their daughters, who are minors, and a family member named Shirley Garner reside at the property. There is no evidence of a tenancy.
[50] Rule 60.10(1) permits the court to make an order for a writ of possession at the same time as an order is made entitling the plaintiff to possession. Rule 60.10(2) requires that leave may be granted by the court “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”.
[51] Mr. Riewald produced proof that each of the adult members of the household were served with the Notice Demanding Possession by leaving a copy in a sealed envelope in the mailbox of the property at which the occupancy check was carried out. These notices were delivered on March 13, 2019. There is no evidence that any of the adults have applied for relief, other than contesting this motion. Accordingly, I am satisfied that the statutory prerequisites for granting leave to issue a writ of possession have been met.
Madam Justice S.E. Healey
Released: October 15, 2019