Court File and Parties

COURT FILE NO.: -CV-20-636245 DATE: 2020-10-05 ONTARIO SUPERIOR COURT OF JUSTICE -

B E T W E E N: Tina Sharma et al. -and - Albert Heffernan

BEFORE: F.L. Myers J. COUNSEL: Nathalie Hamam, for the Applicants No one appearing for the Respondent READ: October 05, 2020

Endorsement

[1] This application was read in writing in default of any appearance by the respondent. I am satisfied that the respondent has notice of this application as he spoke with counsel for the applicants.

[2] The applicants are employees of the Canada Revenue Agency.

[3] Mr. Heffernan is unhappy at their treatment of him in denying him an HST refund to which he believes he was entitled. There is unsworn documentation in which Mr. Heffernan suggests that he was in the hospital at the time of his tax audit and the decision to which he objects was made.

[4] Rather than appealing the decision, Mr. Heffernan registered financing statements under the Personal Property Security Act, RSO 1990, c P.10 against the government employees. Financing statements registered under the PPSA are notice to the world that the registrant has secured claims against the assets of the parties named in the financing statements. In other words, to punish the two civil servants, Mr. Heffernan tried to interfere with their personal creditworthiness. He notes in one unsworn letter that he finds this appropriate because he blames them for the fact that he cannot obtain loans from banks.

[5] After appropriate demands from counsel, Mr. Heffernan belatedly discharged his registration against Mr. Akthar. But he has not discharged the registration against Ms. Sharma.

[6] The applicants move to discharge the registration and for payment of $500 each under s. 56 of the PPSA. The relevant parts of s. 56 provide:

Discharge where no security interest acquired

(2) Where a financing statement or notice of security interest is registered under this Act and the person named in the financing statement or notice as the secured party has not acquired a security interest in the property to which the financing statement or notice relates, any person having an interest in the property may deliver a written notice to the person named as the secured party demanding registration of a financing change statement referred to in section 55 or a certificate of discharge referred to in subsection 54 (4), or both, and the person named as the secured party shall register the financing change statement or the certificate of discharge, or both, as the case may be.

Definition

(3) For the purposes of subsections (4) and (5),

“secured party” includes a person named in a financing statement or notice of security interest as the secured party to whom subsection (2) applies. R.S.O. 1990, c. P.10, s. 56 (3).

Failure to deliver

(4) Where the secured party, without reasonable excuse, fails to register the financing change statement, or certificate of discharge or partial discharge, or all of them, as the case may be, required under subsection (1), (2), (2.1), (2.2) or (2.3) within 10 days after receiving a demand for it, the secured party shall pay $500 to the person making the demand and any damages resulting from the failure; the sum and damages are recoverable in any court of competent jurisdiction.

Security or payment into court

(5) Upon application to the Superior Court of Justice, the court may,

(b) order upon any ground that the court considers proper that,

(i) the registrar amend the information recorded in the central file of the registration system to indicate that the registration of the financing statement has been discharged or partially discharged, as the case may be…

[7] I find that Mr. Heffernan registered financing statements although he had not acquired security interests in the property to which the financing statements related. He failed to discharge them within ten days of demand. He had no reasonable basis or colour of right or title for making the filings. He had no reasonable excuse for failing to discharge the financing statements within ten days of demand. He has yet to discharge the financing statement against Ms. Sharma.

[8] Under s. 56 (5)(b)(i) of the PPSA this is a proper case to order the discharge of the financing statement registered against Ms. Sharma that remains undischarged.

[9] The penalties of $500 for each financing statement not removed on a timely basis set out in subsection 56 (4) of the PPSA appears to be mandatory. In any event, they are far lower than the punitive damages I would have considered awarding for Mr. Heffernan’s outrageous conduct.

[10] Although it ought not to be necessary to say so in a civil society, it is not appropriate to register notice of non-existent claims against civil servants with whom one is angry. They were doing their jobs. If they performed poorly or even wrongfully, there are ample mechanisms available for members of the public to complain and right any wrongs. Willfully attacking someone’s personal credit with no legal basis is a despicable act that will be undone quickly and condemned.

[11] The applicants are entitled to costs on a substantial indemnity basis. This application should not have been necessary. Mr. Heffernan’s fit of pique and intransigence caused the applicants or the Attorney General to incur costs for which Mr. Heffernan should be totally liable. Counsel for the applicants may submit a costs outline and submissions of no more than two pages to my Judicial Assistant by October 12, 2020 and copy Mr. Heffernan. Mr. Heffernan may respond with submissions solely on the amount of costs that he should be required to pay to the applicants by submissions of no more than two pages in length in PDF format attached to an email to my Judicial Assistant by October 19, 2020 and copied to Ms. Hamam.

F.L. Myers J.

Date: October 5, 2020