COURT FILE NO.: CV-19-615165
DATE: 2019/10/18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MYRA MENDES
Plaintiff
- and-
MYLES MENDES
Defendant
Pathik Baxi for the Plaintiff
Myles Mendes, self-represented
HEARD: October 8, 15, 2019
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] The Defendant, Myles Mendes, appeals from the Consent Order of Master Short dated March 15, 2019. The Order authorized a court supervised sale of a property municipally known as 685 Seneca Hill Dr. in the City of Toronto.
[2] For the reasons that follow, the Appeal is dismissed with costs of $7,500, all inclusive, payable to Myra Mendes in any event of the cause.
B. Factual Background
[3] Myra Mendes and Myles Mendes are brother and sister. Myles is a licensed mortgage broker. Myra, who is the younger sibling, is the registered owner of the Seneca Hill Dr. property. Myles purchased the property in 1998, when he was 25 years old and Myra was 21 years old. Myles transferred the property to his sister in 2002.
[4] Myles says that he purchased the property as a home for his parents and his sister. He says that he transferred the title to his sister without conveying his beneficial ownership in the property but in order for him to purchase a property of his own outside Toronto. He says that he continued to pay the mortgage and the realty taxes on the property in the years that followed, and that his family lived rent-free until his recent dispute with his sister Myra.
[5] Myra’s version of the history of the family home on Seneca Hill Dr. is very different.
[6] Myra’s version is that Myles’ interest in the property was purchased by her many years ago by a series of mortgage loans on the Seneca Hill Dr. property. She says the proceeds of the mortgages were used, in part, to pay Myles for his equity in the property and, in part, the proceeds were loans she made to Myles. What Myles says were mortgage payments to upkeep the property, Myra says were repayments of the money she lent him.
[7] In January 2019, the parties disputed who owned the Seneca Hill Dr. property. Myles registered a Caution and a Notice pursuant to s. 71 of the Land Titles Act,[^1] against the title of the property. Myles claimed $492,000 and an interest in the Seneca Hill Dr. property. Myra’s response was that Myles owed her $500,000 in repayment of her loans and that he had slandered the title to the property.
[8] The siblings, represented by lawyers, meet to negotiate a settlement, but when that effort failed, Myra sued Myles. He plans by way of a counterclaim in Myra’s action to sue her for a constructive trust interest in the Seneca Hill Dr. property and for payment of decades of occupation rent.
[9] In March 2019, Myles brought a motion for a Certificate of Pending Litigation and Myra brought a motion for a court supervised sale of the property with the proceeds of sale to be paid into court pending the resolution of her claim and Myles’ counterclaim. Both motions were returnable on March 13, 2019.
[10] The parties and their respective lawyers met at the courthouse on March 13, 2019 and rather than argue the motions, they spent several hours negotiating a resolution that would see Myra consent to Myles’ motion for a Certificate of Pending litigation and he consent to her motion for a court supervised sale of the property.
[11] On March 13, 2019 – on consent – Master Short made an order granting leave to Myles to issue a Certificate of Pending Litigation.
[12] On March 13, 2019 - on consent – Master Short made an order permitting Myra to list the Seneca Hill Dr. property for sale on a multiple listing service at an initial sale price of $1.2 million. Master Short’s Order, among other things, provided that no offer shall be accepted unless both parties accept the offer, or the court approve the sale.
[13] On March 14, 2019, Myles registered the order granting leave to obtain a Certificate of Pending Litigation, being Instrument No. AT5094578 against the Seneca Hill Dr. Property. On March 15, 2019, Myles registered the Certificate of Pending Litigation, being Instrument No. AT5095131 against the Seneca Hill Dr. Property.
[14] Myra retained a real estate agent, but there is a dispute between the parties about that retainer and about the agent’s diligence, or lack of it, in marketing the property. For reasons that will become apparent, it is not necessary to provide the details of this dispute. Suffice it to say, Myles seems to have been very unsatisfied with the sale process, and he was particularly unsatisfied because he believed that Myra was controlling the marketing and apparently controlling it poorly or not to Myles’ liking. He was unhappy with the Consent Order granted by Master Short.
[15] On April 15, 2019, Myles served a Notice of Appeal of Master Short’s Consent Order authorizing the court supervised sale of the property. In essence, Myles’ grounds of appeal are that his lawyer did not have instructions to agree to a listing and sale of the property. Myles says that he wanted his motion for a Certificate of Pending Motion and Myra’s motion argued on their merits. He says that he was under duress and browbeaten by his own lawyer into agreeing to the Consent Order, the import of which he did not appreciate or understand.
[16] Myles delivered his Notice of Appeal as a self-represented litigant, which he continues to be.
[17] On April 29, 2019, Myra brought a motion returnable before Master Short for an amendment of the listing price in the Consent Sale Order. Master Short declined to hear Myra’s motion to amend the Consent Sale Order because the original Order was under appeal.
[18] Also, on April 29, 2019, Myles, self-represented, and Myra’s lawyer attended in Civil Practice Court and a timetable was ordered for Myles’ Appeal of Master Short’s Order. Justice Kimmel scheduled the Appeal for May 27, 2019.
[19] Meanwhile, also in April, Myra failed to pay the monthly payment under the second mortgage to Royal Canadian Mortgage Investment Corporation that encumbered the Seneca Hill Drive property, and no further payments have ever been received despite Royal Canadian Mtg’s demands that the mortgage be brought into good standing. The mortgage was registered as Instrument No. AT4495770 in the Land Registry Office for the Land Titles Division of Toronto (No. 80). The mortgage secures the sum of $280,000 with interest at the rate of 12% per annum. The mortgage provides for monthly payments of interest only of $2,800.
[20] In May 2019, Myra advised Royal Canadian Mtg that she could no longer make payments under the second mortgage and that she would voluntarily vacate the Seneca Hill Dr. property.
[21] Myles’ Appeal did not proceed on May 27, 2019 and rather the parties attended in Civil Practice Court on May 27, 2019 and again May 31, 2019. On May 31, 2019, the Appeal was rescheduled for September 27, 2019 peremptory for all parties. A timetable was ordered.
[22] On June 3, 2019, Myra signed an acknowledgment that she would vacate the Seneca Hill Dr. property.
[23] On June 10, 2019, Royal Canadian Mtg took possession of the Seneca Hill Dr. property.
[24] On June 14, 2019, Royal Canadian Mtg commenced mortgage power of sale proceedings with respect to the Seneca Hill Dr. property. The notice of power of sale was served on both Myra and Myles.
[25] On June 27, 2019, Royal Canadian Mtg was advised that the first mortgage was in default. The first mortgagee, Bridgewater Bank, demanded full payment of the first mortgage in the amount of $460,113.06 on or before July 2, 2019.
[26] On July 3, 2019, Royal Canadian Mtg paid out the first mortgage, and the first mortgage was discharged from the title of the property on July 17, 2019. The Royal Canadian Mtg mortgage is now the first mortgage on the property with a greater indebtedness that combines the debt of the old first mortgage with the debt of the second mortgage.
[27] Neither Myra nor Myles exercised any right to redeem the mortgaged Seneca Hill Dr. property, and on July 23, 2019, Royal Canadian Mtg signed an agreement to sell the property to Eduardo Chen. The purchase price was $895,000.
[28] On August 20, 2019, there was another attendance in Civil Practice Court, this time initiated by Royal Canadian Mtg. The purpose of the attendance was to schedule an application to vacate the two Certificates of Pending Litigation that Myles had registered. Justice Dow scheduled Royal Canadian’s Mtg’s Application for September 19, 2019. Mr. Chen and Royal Canadian Mtg agreed to extend the closing date.
[29] On September 9, 2019, there was a further attendance in Civil Practice Court. Myles asked Justice Archibald for additional time to deliver responding materials to Royal Canadian Mtg’s Application. Justice Archibald rescheduled the hearing of Royal Canadian Mtg’s Application to September 27, 2019, which was the date scheduled for the Appeal from Master Short’s Order.
[30] The Application and the Appeal were not heard on September 27, 2019 because on September 24, 2019, there was yet another attendance in Civil Practice Court and Justice Archibald made the following file direction:
Mr. Mendes is begging the court for a bit more time. These are serious issues. I have granted him an additional two weeks to respond. Motions to be argued on October 8, 2019 (3 hours) peremptory to Mr. Mendes. Both motions to be heard. All counsel have been advised of this date.
[31] The Application and the Appeal came on before me on October 8, 2019. By this time, Myles had not perfected his Appeal from the Order of Master Short. Nor had he filed material to respond to Royal Canadian Mtg’s Application. However, he appeared in court with his materials for the Appeal and for the Application. He had not served the material on Myra or on Royal Canadian Mtg and he did not bring copies. He requested an adjournment. I instead recessed the motions for several hours to allow him to make copies of the materials, and then, I granted the adjournment. I made the following endorsement:
Mr. Mendes appealed the order of Master Short in this action, in which he is a plaintiff by counterclaim. Ms. Mendes, his sister moved to have the appeal dismissed for his failure to meet the deadline for perfection, which is to say that she sought to quash the appeal without a hearing on its merits. Mr. Mendes sought an adjournment in order to file his material. Mr. Mendes, after a recess, delivered his appeal material (improperly named a responding record). I shall hear the appeal on Tuesday October 15, 2019 at 9:00 a.m. Ms. Mendes has until Friday October 11, 2019 to deliver a factum. I am treating Mr. Mendes’ motion record as also his factum. Service may be done by email.
[32] In his Appeal material delivered on October 8, 2019, Myles requested an order striking Myra’s claim in its entirety and transferring the Seneca Hill Dr. property to him. During argument, he asked that the court review the propriety of the actions of the real estate agent retained by Myra and the propriety of the power of sale proceedings commenced by Royal Canadian Mtg.
C. Discussion and Analysis
[33] As I explained to Myles during his oral argument, his litigation with his sister will go on and the merits of that litigation and the merits of any claim he may have against Royal Canadian Mtg for an improvident sale are not before the court.
[34] In the action between him and his sister, the only matter before the court is his Appeal of Master Short’s Order authorizing a court supervised sale of the Seneca Hill Dr. property.
[35] There are several reasons to dismiss Myles’ Appeal from Master Short’s Order, beginning with the reason that the Appeal is moot and has been moot for some time.
[36] Myles acknowledged in the material that he filed in response to Royal Canadian Mtg’s Application and in his Appeal Record that his Appeal was prompted because he believed his sister had circumvented his registration of a certification of pending litigation by acquiescing to Royal Canadian Mtg’s power of sale proceeding. In other words, he thought that by consenting to Master Short’s judicial sale Order, he could control the sale of the property but with Royal Canadian Mtg initiating a power of sale, Myles no longer has a say in the sale of the property.
[37] In truth, Royal Canadian Mtg now controls the sale of the property. Its power of sale proceeding, in effect, has overtaken the court supervised sale of the property ordered by Master Short. This makes Myles’ Appeal all of moot and futile.
[38] If the Appeal were granted or if it is dismissed, the fact is that Royal Canadian Mtg now does control the sale of the property. The first and second mortgages have gone into default. Royal Canadian Mtg exercised its power of sale. Myles had but did not exercise his right to redeem. His Appeal of Master Short’s sale Order is meaningless in these circumstances because neither he nor his sister control the sale of the property.
[39] Moreover, and in any event, Myles purported grounds of Appeal do not allege any error by Master Short and rather are complaints against Myles’ own lawyer. Myles is a mortgage broker and he assuredly must know that the mortgagee not the mortgagor controls the sale of a property once the mortgage goes into default.
[40] As a matter of the standard of appellate review, there is no basis to overturn Master Short’s Order. In other words, on its merits, Myles’ Appeal should be either quashed or dismissed.
[41] And, if that were not enough, Myles’ Appeal of a Consent Order requires leave, which he has not sought and which I would not have granted had he sought it. Section 133 (a) of the Courts of Justice Act,[^2] states:
133 No appeal lies without leave of the court to which the appeal is to be taken,
(a) from an order made with the consent of the parties; ….
[42] Myles failed to seek leave to appeal the Consent Order as required by the section 133(a) of the Courts of Justice Act. The Appeal should be quashed on this ground.
[43] If I treat his material as seeking leave, notwithstanding that he has not followed the procedure for obtaining leave, he does not satisfy the test for granting leave from a consent order.
[44] Section 133(a) of the Courts of Justice Act does not specify grounds for granting leave to appeal a consent order and no clear test has developed in the case law. However, the case law reveals that courts are very reluctant to grant leave to appeal when the parties have consented to an order, which is to say that they have represented to the court that a matter has been resolved.[^3] Consent orders are regarded as contractual in nature and applying contractual principals leave to appeal should not be granted, unless the evidence before the court on the leave application demonstrates an arguable case that when the Order was made, the consent of the party seeking was obtained by fraud, duress, mistake, undue influence or some other vitiating circumstance.[^4]
[45] Myles is a competent adult who was represented by a lawyer at the time of the Consent Order. There are no vitiating circumstances in the immediate case and no basis to grant leave to appeal.
D. Conclusion
[46] For the above reasons, Myles’ Appeal is dismissed with costs of $7,500, all inclusive, payable to Myra Mendes in any event of the cause.
Perell, J.
Released: October 18, 2019
COURT FILE NO.: CV-19-615165
DATE: 2019/10/18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MYRA MENDES
Plaintiff
- and-
MYLES MENDES
Defendant
REASONS FOR DECISION
PERELL J.
Released: October 18, 2019
[^1]: R.S.O. 1990, c. L.5.
[^2]: R.S.O. 1990, c. C. 43.
[^3]: Ruffudeen-Coutts v. Coutts 2012 ONCA 65; Fott v. Fott, 2001 ABQB 327; Holt v. Jesse (1876), 3 Ch. D. 177 at p. 184. (Eng. Ch. Div.).
[^4]: Ruffudeen-Coutts v. Coutts 2012 ONCA 65 at paras. 63-64; Childs v. Childs, 2017 ONCA 516 at paras. 58-59; Yan v. Chen 2014 ONSC 3111 at para. 84.