COURT FILE NO.: CV-16- 647-00
DATE: 2020 11 19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BANK OF MONTREAL Plaintiff
- and -
GRANVILLE CADOGAN also known as GRANVILLE NOLLEY CADOGAN also known as GRANVILLE N. CADOGAN Defendant
Ron Aisenberg for the plaintiff, Applicant on the motion No one appearing
HEARD: September 2, 2020 by video conference
REASONS ON SUMMARY JUDGMENT MOTION
D.E HARRIS J.
[1] The plaintiff moves for summary judgment and for special and punitive damages as well as dismissal of a counterclaim. The motion and part of the relief requested is granted for the following reasons.
[2] The defendant is a lawyer. It is alleged that he falsely stated on an electronic transfer of real property that his client, Donna Watkis, had obtained a full release, thus permitting the client to sell her home despite Bank of Montreal’s (BMO) writ of execution on the property.
THE ADJOURNMENT REQUEST
[3] At the outset of the hearing, counsel purporting to act for the defendant requested an adjournment. The adjournment was refused for the following reasons.
[4] The motion had originally been up for hearing about 8 months previously, on January 8, 2020, before Justice Stribopoulos. The defendant, Mr. Cadogan, representing himself, sought leave to file an affidavit from his former client, Donna Watkis, the debtor. There were some reasons put forward for not filing the affidavit in the 7 months since the plaintiff filed their motion record but Justice Stribopoulos found the failure to file was “entirely inexcusable.” Nonetheless, given the potential consequences to Mr. Cadogan of an adverse result, Justice Stribopoulos reluctantly agreed that the document could be filed, which led to the matter being adjourned at the request of the plaintiff. The date set for the new hearing was September 2, 2020. Justice Stribopoulos stressed on two occasions in his endorsement that there would be no further adjournments permitted.
[5] On this hearing, Mr. Cadogan did not appear. A lawyer who appeared only by audio and introduced herself as T.K. Andersen said that she had been retained by Mr. Cadogan. Ms. Andersen said that she had been retained “during the emergency measures” but when repeatedly pressed, was unable to be more specific. That left the time frame in which she was retained somewhere from mid-March to September, a period of six months. Ms. Andersen reported that Mr. Cadogan was sick and could not attend. Over all, Ms. Andersen was exceedingly vague. She could not say where Mr. Cadogan was. She had no instructions other than to obtain an adjournment and knew very little about the file. She had none of the material filed by the plaintiff despite it all being electronic. She had not been in touch with Mr. Cadogan recently.
[6] Mr. Aisenberg said that he had been contacted via email the night before at 10:41 p.m. by a lawyer by the name of Paul Scotland. Mr. Scotland paid the $1000 in costs outstanding and said he was retained. Mr. Scotland did not appear at this virtual hearing.
[7] Mr. Aisenberg brought to my attention an unrelated Law Society matter involving Mr. Cadogan. In Law Society of Ontario v. Cadogan, 2019 ONLSTH 120, the Law Society panel was dealing with a request by Mr. Cadogan for an adjournment of his matter. Mr. Cadogan had invoked a vague and unsubstantiated excuse that he had been ill and in hospital. No documentary evidence was tendered. The adjournment request was denied.
[8] There is more than passing resemblance between that situation and this one. Mr. Cadogan had clear and unequivocal notice many months ago that this matter would be going ahead on this date. He dispatched an agent with no instructions other than to seek an adjournment. She had no knowledge of the file and could not even say when she was retained by Mr. Cadogan. The illness excuse has been trotted out before by Mr. Cadogan. Here, as before, there was no documentary support for it whatsoever. This ought to have been simple enough to obtain if it was true. It must have been clear after Justice Stribopoulos’s endorsement that there would be a high onus on Mr. Cadogan to obtain an adjournment. Mr. Cadogan’s behaviour fits into a pattern of obfuscation and attempting to put off his day of reckoning.
[9] To order an adjournment in these circumstances would have been to permit an abuse of the court’s process. For these reasons, the adjournment request was denied at the hearing.
THE MERITS
Factual Background
[10] On June 20, 2010, BMO retained the law firm KRMC and commenced an action in Brampton against Ms. Watkis on three credit card debts. On July 11, 2011, Justice Richetti granted summary judgment for a total of $40,354.01 plus post-judgment interest. Within days, BMO filed a Writ of Seizure and Sale electronically in the Enforcement Office of Oshawa/Whitby (Durham) bearing execution 11-0002295 ("the Writ"). Between August 2011 and January 2015, based on an agreement made between Ms. Watkis and KRMC, Ms. Watkis made a total of 30 payments. The payments totalled $6,200. According to an affidavit filed on the motion from an assistant at KRMC, Ms. Mohammad, on February 10, 2015 Ms. Watkis called KRMC, BMO’s lawyers, and offered to pay $29,000 to settle the Writ. This offer was not accepted
[11] Up until late April, 2015 there were requests by Mr. Cadogan of Ms. Mohammad of KRMC to determine the remaining debt. Ms. Mohammad has notes with respect to the contacts which included: A March 4, 2015 call from Mr. Cadogan prior to 12:20 p.m. asking for the writ payout statement immediately; a call from Mr. Cadogan on March 11, 2015, after the payout statement was faxed, saying that his client was short of funds by $5000; a March 20, 2015 letter from Mr. Cadogan, asking for a breakdown of the payout amount. The breakdown letter was faxed soon afterwards, and messages left for him. Mr. Cadogan called Ms. Mohammad on April 23, 2015. Ms. Mohammad’s note of the conversation indicated that Mr. Cadogan said that he had instructions to pay 2 of the 3 debts. Mr. Cadogan said the third debt was a mistake and there was no judgment with respect to it. Ms. Mohammad told him that she disagreed. In the end, he asked for a fax of the 3rd claim so that he could check it. This was sent out.
[12] In actual fact, before any of this back and forth, on March 4, 2015, at 3:41 p.m., three hours after Mr. Cadogan’s call to Ms. Mohammad, Ms. Watkis transferred her property free of the Writ to two purchasers for a total of $680,000. There were some mortgages on the property which came to about $512,000. There would, in light of this, have been significant proceeds of the sale in Ms. Watkis’ hands. BMO and its lawyers did not become aware of the transfer until several months later, in September 2015.
[13] It was discovered that the transfer included a statement made on the electronic registry by Mr. Cadogan that, “A complete unconditional and unqualified release from the judgment creditor for this writ has been obtained." This is a prescribed “law statement” required in the event a writ has been removed: Land Registration Reform Act, Electronic Registration, O Reg 19/99 (Past version: in force between June 30, 2011 and Jan 10, 2016), s. 34(1)(a) and s. 34(2)(b).
[14] It is alleged by the plaintiff that this statement by Mr. Cadogan was false. BMO’s execution was still on the property.
The Law
[15] Ontario has an electronic land registration system. It is an honour system largely dependant on lawyers’ honesty. When a transfer or charge of the property is affected the lawyer must include a “law statement” (Land Registration Reform Act, R.S.O. 1990, c.L.4, ss. 2, 3, and 29 and O. Reg. 16/99, ss. 1, 3(1)). Before making such a statement, the lawyer must be satisfied that he or she has the necessary evidence to support it: 1168760 Ontario Inc. v. 6706037 Canada Inc., 2019 ONSC 4702 at paras 20-21 (Ont. Div. Ct.). Consistent with this, there is a Law Society practice guideline reassuring purchaser’s lawyers that they do not have to make further inquiries to look behind the “law statement”: 1168760 Ontario Inc. v. 6706037 Canada Inc., at para 23; Practice Guidelines for Electronic Registration of Title Documents, as approved by Convocation, June 28, 2002, at p. 14. Purchasers are entitled to rely on the statement itself.
[16] The assistant from KRMC, Ms. Mohammad, has deposed that only the $6200 was paid by Ms. Watkis based on the installment agreement made with her around August 2011. Ms. Watkis’ offer to settle made in February 2015 was never accepted. The afternoon before the motion for summary judgment which came up in front of Justice Stribopoulos on January 8, 2020, Mr. Cadogan served the affidavit from his former client, Ms. Watkis sworn the previous day. The affidavit has two themes: 1. The amount claimed on the writ by the plaintiff was inaccurate; and 2. Ms. Watkis settled the debt by an arrangement to pay $29,000 in 2011. It was to be paid in installments. She says at paragraph 6 of her affidavit that “[I] instructed my solicitor [Mr. Cadogan] to discharge the Writ because the Bank settled the debt with me in 2011 for $29,000.”
[17] At paragraph 8, Ms. Watkis attests “I have been in contact with the Plaintiff [BMO] throughout the years. I recently spoke to the Plaintiff through its solicitors in September of 2019. The Plaintiffs solicitors are now offering to settle for $22,000.00.” At the end of paragraph 8, she goes on to say,
The settlement I reached with the Plaintiff [BMO] in 2011 and as early as 2009 [sic] was a full release of all debts for $29,000.00. I have not run from the Plaintiff and I have engaged with the Plaintiff throughout the years. The so call [sic] notes Ms. Mohammad claims in her affidavit of conversations are incomplete and selective entries and do not truly record the entire conversations.
Summary Judgment
[18] Summary judgment is governed by Rule 20 of the Rules of Civil Procedure as interpreted by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (S.C.C). In that case, Justice Karakatsanis writing for the court focused on whether, as the rule states, there is a “genuine issue requiring a trial.” Can the judge find the necessary facts from the summary judgment material?: Hyrniak at paras. 47-51; Kawartha-Haliburton Children’s Aid Society v. M.W., 2019 ONCA 316, [2019] O.J. No. 2029 at para. 63.
[19] The affidavit of the debtor Ms. Watkis states that the debt to BMO was settled, implying that Mr. Cadogan was justified in removing the writ with his “law statement.” The question of whether her version is correct, or that of the diametrically opposed version of the plaintiff, is a matter of credibility. Therefore, in my view it would be inappropriate to simply enter summary judgment without more. There is a genuine issue raised.
[20] Moving on to Rules 20.04(2.1) and (2.2), these provide new fact-finding powers to be used on a summary judgment motion. Evidence may be weighed, credibility evaluated, and oral evidence on an issue may be called. This does not mean, of course, that all credibility issues can be resolved by the new fact-finding powers. The Court of Appeal has held, “The more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record”: Cook v. Joyce, 2017 ONCA 49, at paras. 81-82, 91-92, also see Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at para. 44.
[21] In this case, I am satisfied that other unchallenged documentation in the record is definitive in resolving the credibility contest. Mr. Cadogan’s course of conduct itself contradicts his client’s position that this matter was settled. Ultimately, I reject Ms. Watkis’ evidence for this reason.
[22] First, the affidavit of Ms. Watkis was served at the 11th hour in this litigation, the night before the summary judgment motion on January 8, 2020. The amended Statement of Claim initiating this action and alleging fraud and misrepresentation by Mr. Cadogan had been filed February 10, 2016, almost 4 years before. The Defence and Counterclaim was filed by Mr. Cadogan on his own behalf on or around March 28, 2016.
[23] Aside from the highly suspicious delay of almost 4 years in filing the affidavit from the client debtor which would, if true, exonerate the defendant of allegations tantamount to fraud, the Defence and Counterclaim written by Mr. Cadogan makes no mention of anything remotely like a settlement made between Ms. Watkis and the plaintiff. Furthermore, Mr. Cadogan sent a letter March 20, 2015, 16 days after the transfer of the real property and the placement of the “law statement” on the registry. The letter does not assert that the matter had been settled but instead asks for an accounting to substantiate the $68,966.51 amount which was stated by KRMC as the amount required to remove the writ. There would have been no need for this letter to have been written and sent if Mr. Cadogan’s client had already settled the matter.
[24] In addition, the client’s affidavit contains some major discrepancies and is in itself incredible. It refers to settling the debt in 2011 or maybe even 2009. That makes no sense. Even according to her own evidence, there were installments to pay off the accumulated credit card debt well after this time, into 2015.
[25] Ms. Watkis’ affidavit is irreconcilable with indisputable facts. For that reason, I reject it in its entirety. In the absence of any other evidence, I find that Mr. Cadogan’s law statement on the electronic registry was false and, in the circumstances, must have been known by him to be false.
[26] Summary judgment is granted as asked: $56,705.33 for the loss of the writ, $4,507.20 for post-judgment efforts to enforce its judgment against Ms. Watkis, and pre-judgment interest on both these amounts to bring the total to $63,494.04. I dismiss the counterclaim which, in my view, is frivolous.
[27] With respect to punitive damages, BMO requests $75,000. Counsel argues that the electronic registration honour system must be protected, and a punitive award is necessary to assist in achieving that objective. I am in agreement that a punitive award is necessary to denunciate Mr. Cadogan’s misconduct and to deter others similarly disposed.: Whiten v. Pilot Insurance Co., 2002 SCC 18 (S.C.C.) at para. 123; Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669, 117 O.R. (3d) 481 (Ont. C.A.) at paras. 211-239. While the matter of fixing punitive costs is not an easy one, in my view an appropriate punitive award is $20,000.
[28] Judgment for the plaintiff in accord with these reasons. Costs submissions can be submitted within 30 days, not exceeding 2 pages.
D.E HARRIS J.
Released: November 19, 2020
COURT FILE NO.: CV-16- 647-00 DATE: 2020 11 19
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
BANK OF MONTREAL Plaintiff
- and –
GRANVILLE CADOGAN also known as GRANVILLE NOLLEY CADOGAN also known as GRANVILLE N. CADOGAN Defendant
REASONS ON SUMMARY JUDGMENT MOTION
D.E HARRIS J.
Released: November 19, 2020